Is Musk in trouble?? We should know something as soon as the legal proceedings initiated by the Securities and Exchange Commission (SEC) against Elon Musk are over.
Musk is accused of fraud in connection with his statement on "Twitter" about his intentions to take Tesla out of the stock exchange and make it a private corporation. Immediately after this tweet, the price of Tesla's stock immediately skyrocketed.
Also, Musk wrote that he had found investors for his proposal, according to which the company's share price was valued at $420 per share.
In a statement by the SEC referring to Musk, it is said that the businessman determined the value of Tesla shares based on the value of the stock at the close of trading, plus another 20%, because he believed that charging a 20% markup is a common practice in obtaining private money transfers of the company.
His calculations gave a cost of 419 dollars, which Musk rounded to 420 dollars.
He did this because he recently found out that this figure has a special meaning in the culture of users of marijuana, and felt that it would amuse his girlfriend - Canadian indie singer Grimes. Musk admitted at the same time that this is not the best reason for determining the company's price.
His tweets, which appeared on August 7, surprised even Tesla's employees.
"Is that the truth?" - wrote then the head of the department for investor relations to the head of the team Musk, said in the statement of claim.
I really like Musk. I like his vision and his ideology and his overall non-nonchalant attitude toward business. I like how he disrupted the auto industry and paved the way for electric vehicles. But that Tweet was stupid and he should be fined for it. There are rules in place for what types of announcements high executives can make to the public and every CEO is aware that you cannot make announcements that influence investor behavior and attitude. These rules are in place to protect the public from insider trading and other forms of stock price manipulation. It is not only rich people who invest in stocks like Tesla, its also average people who are trying to save for their retirement. As a high ranking exec, he knew it was something that shouldn't be done. If it was a lapse in judgement then he should be fined for being stupid. If it was to manipulate the price then he should be fined for putting the public at risk. Just my opinion