Nowadays, any publication of Elon Musk on Twitter it becomes news. However, the mogul doesn’t care if his tweets have serious repercussions. For him, everything is laughter and fun, but the regulatory bodies still don’t find it funny, even less when his messages are capable of altering, for better or worse, the performance of a company on the stock market.
In fact, during the trial against Elon Musk for his possible market manipulation, his tweets became the focal point of the conversation. The authorities consider that his publications, such as the one in which he assured that the financing to take Tesla private was secured, may trigger unusual behavior in the market. This is quite worrisome, especially since it involves the money of many investors.
Nevertheless, Elon Musk tried to downplay his messages on Twitter. In fact, he hinted that they have no impact. In addition, he believes that people, at least in relation to the financial issue, do not react based on his tweets.
“Hard to say that the stock price is related to the tweet. Just because I tweet something doesn’t mean people will believe it or act on it.”
Elon Musk.
The event that led to the trial against Elon Musk
However, his words are far from what really happens. During 2018, Elon Musk shared a tweet that, shortly after, sparked quite a stir and confusion: “I am considering taking Tesla public at $420. Secured financing. In a matter of minutes, the value of the electric automaker’s shares skyrocketed.
The reality check came right away. It was evident that his idea had no real chance of coming to fruition. US regulators, for their part, warned that the situation would not go unnoticed. The consequence was immediate: Tesla’s stock value plummeted.
The SEC (Securities and Exchange Commission) sued Elon Musk for causing a volatility in Tesla shares through a publication with misleading information. The businessman described the legal action as “unjustified” and said he had acted in favor of “truth, transparency and investors.”
Although at first there was talk of really serious consequences, including his permanent departure from Tesla, in the end Elon Musk and the SEC reached an agreement. The tycoon agreed to pay a fine of $20 million dollars and, in addition, to leave his position as president of the company’s board for three years.
However, this did not prevent some affected by volatility from undertake their own lawsuits demanding millionaire compensation. That is the reason why, this week, a trial began with Elon Musk as the main defendant.
Despite the fact that the tycoon usually transmits a lot of calm, this time seems to be a bit worried. Because the trial is taking place in California, he believes that the massive firing of Twitter employees—ordered by him after he became the owner—could condition the jury’s decision.