Tesla investor sues Musk, company’s board for ‘erratic tweets’

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The Twitter comments of Tesla Inc chief executive officer Elon Musk are making a company investor very upset that he’s bringing the matter to court.

A Tesla stakeholder is filing charges against the electric carmaker’s board and its CEO for continuing to send so-called “erratic tweets” that infringe on a settlement with the U.S. Securities and Exchange Commission mandating oversight of Musk’s social media activities.

Based on a complaint filed Thursday in Delaware Chancery Court, Musk’s inconsistent tweets and the failure of the company’s board to guarantee he complied with the SEC settlement have exposed investors to billions of dollars of losses.

Unsafe tweets?

The lawsuit claims that Musk is exposing Tesla to potential penalties from regulators and could drag down Tesla’s share price. The lawsuit, first disclosed by Bloomberg, has identified the company’s board for failing to control Musk’s behavior, which puts the Palo Alto, California-based company at risk.

The lawsuit was filed even though the electric vehicle manufacturer’s share price has climbed almost five times since Musk’s “too high” comment on Twitter, giving the company a valuation that breached the $600 billion level. The SEC has not publicly claimed that Musk has made any violations.

Musk, Tesla, and the SEC agreed in April 2019 that accorded Musk the liberty to use the popular social media platform — within certain conditions — without fear of being held in contempt for violating an earlier court order, according to TechCrunch.

Regulated tweets

The agreement that Musk and Co. have made with SEC allows him to tweet as he desires except when it is about certain events or financial achievements. In such cases, Musk must first get the approval of a securities legal counsel, based on the agreement filed with the Manhattan federal court.

Meanwhile, Musk’s regular tweets about the Dogecoin cryptocurrency caused a short-term price surge, but the overall sentiment about the meme-based digital asset does not appear to be optimistic.

EXMO, a British-headquartered crypto exchange, asked traders about their opinion on Musk’s impact on DOGE’s price and only 14% believed the token would continue to grow without the support of Musk and other celebrities.

Image courtesy of TheRichest/YouTube

Jet Encila

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Jet Encila

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