Even though he's one of the busiest people in the world, Tesla CEO Elon Musk spends a lot of time on Twitter. However, in his defense, he recently tweeted that most of his tweets are sent while he's "dropping some friends off at the pool." Yes, the CEO has been tweeting about popping. Perhaps it moved markets, but who knows.
In all seriousness, Musk has sent many a tweet over the years that almost certainly moved markets. More specifically, Tesla stock, related stock, and cryptocurrency. While Musk has been tweeting controversial and market-moving words for years, the whole situation was fueled by a specific tweet a few years back. Musk said he was going to take Tesla private at $420 per share: "Funding secured."
A whole lot has happened since then, but Musk never took Tesla private. Needless to say, the SEC wasn't happy, it went after Musk, and he was to have his tweets reviewed if they could potentially impact Tesla's stock. Basically, he's not supposed to tweet about anything "material to Tesla."
We have no idea if Musk still has a "Twitter sitter," or if he ever really had one in the first place. He hasn't seemed to care about the SEC's concerns, and he's even tweeted negatively about the commission.
More recently, Musk has been going after politicians, tweeting about the billionaire tax, running a poll asking whether he should sell stock, and on and on. Now, a lawsuit has been filed against Tesla in Delaware, and it's related to Musk's Twitter poll about his sale of stocks. Since Musk issued that tweet, Tesla's stock has been declining significantly, though not nearly as much as it has proven to be a rollercoaster in the past.
According to Bloomberg Law, the Delaware Chancery Court is accusing Musk of tweeting "impulsively and recklessly," which it says is in violation of the SEC's earlier "Twitter sitter" agreement with the Tesla CEO. The court notes that it's not clear if anyone is still reviewing Musk's tweets.
It's difficult to forecast how this will play out. However, while Musk regularly publishes tweets that have seemed proven to move markets, it's unclear if it's his intention to do so. In some cases, it seems pretty obvious that Musk is up to something, though in many cases, people seem to be reading into his tweets and acting on them, even though Musk may not have intended to persuade them to act.
At any rate, the lawsuit states:
“Musk remains undeterred and continues to post on Twitter and social media on matters that are material to Tesla and its stockholders, and which ultimately have an impact on Tesla’s stock prices."
We'd love to read your take on this. Do you agree with the court? How do you expect this to play out? Start a conversation in our comment section below.