facebook

Tesla CEO Elon Musk’s tweet has triggered a federal lawsuit

The Securities and Exchange Commission announced on Thursday that it is suing Elon Musk, the CEO of Tesla, for comments he made on Twitter suggesting that he would take his company private when its stock price hit $420 per share.

This is a Very Bad Thing to tell your 22 million followers if you’re running a $50 billion, publicly traded company. As Vox’s Emily Stewart explained, “it wasn’t clear how much groundwork had actually been laid for such a maneuver, and it’s illegal for companies and executives to give shareholders misleading information about potentially meaningful corporate events.”

Musk has since backtracked, but regulators are not letting this go. The Department of Justice launched a criminal probe, and now the SEC has filed suit against Musk himself.

The SEC complaint is worth a read and outlines some of the bizarre turns of this scandal:

  • Regulators started paying attention when Musk started taunting short sellers of his company’s stock in May, saying that they “have about three weeks before their short position explodes.”
  • An unnamed sovereign investment fund reached out to Musk in July and broached the idea of taking Tesla private and building a Tesla manufacturing plant in the Middle East, but the talks were vague. “The July 31 meeting lacked discussion of even the most fundamental terms of a proposed going-private transaction,” according to the complaint.
  • In early August, Musk sent an email to his board of directors with the subject “Offer to Take Tesla Private at $420.” In the message, he decried “constant defamatory attacks by the short-selling community, resulting in great harm to our valuable brand.”
  • He calculated the price by adding a 20 percent premium to the company’s share price at the time, arriving at $419. He rounded up to $420 because “he had recently learned about the number’s significance in marijuana culture and thought his girlfriend ‘would find it funny, which admittedly is not a great reason to pick a price.’”
  • Tesla investors were rattled. “What’s Elon’s tweet about? Can’t make any sense of it,” one shareholder texted to Musk’s chief of staff.

The SEC concluded that Musk should pay a fine and be banned from serving as an executive or board member of any public company.

The central concern for the SEC is that Musk made it seem like he already had the money lined up and the price confirmed, with a shareholder vote being the only thing standing between him and privatizing Tesla. His tweet “set off a trading frenzy,” according to the complaint, and pushed Tesla’s stock price up more than 6 percent, forcing Nasdaq to halt Tesla trading for 90 minutes until the company gave an official response. The company’s stock price closed at $379.57 on the day of the tweet.

In reality, almost nothing was underway at that point, few company officials were even aware of the prospect, no funders were secured, and prices weren’t settled. “Musk’s statements were premised on a long series of baseless assumptions and were contrary to facts that Musk knew,” according to the SEC.


U.S. Securities and Exchange Commission Co-Directors of Enforcement Steven Peiken and Stephanie Avakian announced a lawsuit on Thursday against Elon Musk for statements Musk made on Twitter suggesting he would take his company Tesla private.

US Securities and Exchange Commission Co-Directors of Enforcement Steven Peiken and Stephanie Avakian announced a lawsuit on Thursday against Elon Musk for statements Musk made on Twitter suggesting he would take his company Tesla private.
Zach Gibson/Getty Images

This latest development adds to a long list of weird antics from Musk, who is also being sued for defamation after calling a diver a pedophile. The diver helped rescue a Thai soccer team trapped in a cave this summer and criticized Musk’s efforts to help with a submarine.

This summer, Musk was at the center of a rift between his girlfriend — the singer Grimes — and the singer Azealia Banks, who said she had been abandoned at Musk’s house for days.

Musk also smoked marijuana during an interview with podcast host Joe Rogan earlier this month, a move that angered Tesla employees who face drug testing.


Elon Musk smoking marijuana on the Joe Rogan Experience.

Maybe you should lay off the wacky tobacky, Elon.
The Joe Rogan Experience/YouTube

And yet Tesla can’t seem to quit Elon.

Despite Musk’s liabilities, Tesla’s management is reluctant to let go of him. His persona (or cult of personality) is integral to the brand. Analysts have said there is an “Elon Musk premium” embedded in the company’s stock price. So despite the headaches he’s caused his board members, Musk isn’t likely to go anytime soon.

The SEC case will now head to the federal district court in the Southern District of New York, and if Musk loses, he could be forced to step down from Tesla. However, he may hang on to his posts at Neuralink and the Boring Company, which are still private companies.



Source link

Buds2Go

Buds2Go

This is the Buds2Go Staff Account. We work really hard to provide information and news about marijuana legalization, product information and promotional events going on across Canada. We are fanatics and experts on strains and utilizing medical cannabis for the treatment of common ailments.
Buds2Go
Buds2Go.ca is not responsible for, nor do we always share the opinions of the content posted on our website through our partners or independent authors.

Leave a Reply


What is a Sativa?

Sativa strains of medicinal marijuana are usually uplifting and stimulating. If you’ve ever smoked or ingested cannabis that makes everything funny and puts you in a great mood, it was probably from a Sativa strain. It creates a feeling of comfort, non-drowsy, and usually introspective highs. The effects of smoking or ingesting a Sativa makes them particularly popular among artists and creatives. The most popular medicinal benefits range from treating mental and behavioral problems, to treating depression, stress and ADHD.

What is an Indica?

The major difference between Sativa’s and Indica’s is while a Sativa can make you feel alert, active, and aware, an Indica will have a relaxing feel on the body. The physical effects of an Indica strain commonly include a drowsy and mellow mood with stress and pain relief. Indica’s are one of the more suggested strains when using it for medicinal purposes as it effectively treats sleeping disorders such as insomnia, fibromyalgia, body aches and pains. Indica’s are also commonly used for treating Multiple Sclerosis, Parkinson’s disease, Fibromyalgia and Lupus

Why Choose Hybrid?

The benefits to smoking or ingesting a Hybrid strain are simply as follows. Hybrid’s offer the best of both worlds combining several qualities of each containing strain. Some Hybrid’s are Indica dominant, which will offer pain relief and / or mellow mood, however may contain up to 50% Sativa so it will not make you too drowsy. Other’s may offer a Sativa dominant strain, which will encompass several calming benefits and pain relief, but also give a mellow, yet energetic high.

Why use Buds2Go?

We offer a guaranteed, reliable medicinal marijuana buying and shipping experience for our members. There are still thousands of people who don’t live in areas that are served by local dispensaries such as Vancouver and Victoria BC. We offer a Canada-Wide shipping service that is both fast and discreet and always include tracking numbers. We verify our members age using a photo ID verification system that usually takes less than 2 hours to complete, after which that data is destroyed and our new member is assigned a Verified membership number.