The trial was a long and complex affair that centered on whether or not Elon Musk knew that the tweet he sent in early October 2017, alleging he had “funding secured” for a Tesla buyout, was untrue at the time. In the end, the jury found him not liable on two separate counts of securities fraud, one based on false statements made about an existing agreement and another based on suggesting that his company would be taken private at a bargain price. While this exonerates Musk from any real wrongdoing, it does little to mitigate
The lawsuit alleged that by making these statements, Musk negligently misled shareholders, cause them to lose money. The fact that he secured the funding means the tweet was not completely false, but it still caused confusion and undermined Tesla’s stock price.
The shareholders argued that they lost billions as a result of the SEC allegations. Musk faced $20 billion in damages, though his actual legal costs are still unknown.
The jury’s verdict in Tesla’s trial sent the electric car company’s shares up about 1.5% in after-hour trading. The stock had been down significantly since the start of the trial, though it had rebounded somewhat by late afternoon. Tesla is facing charges of fraudulent practice and securities fraud after sending out misleading investors emails during its 2017 initial public offering (IPO). Though it faces significant legal risk, analysts say that stocks could still rebound if prosecutors do not prove their case beyond a reasonable doubt or if Tesla acquires another company with deep pockets that can absorb any damage from a conviction.
The outcome of the trial was a mixed blessing for Tesla shareholders. On one hand, Musk was found liable for his role in orchestrating a potential stock market manipulation, which could result in him paying up to 20 million dollars in damages. On the other hand, he was cleared of any intentional wrongdoing with regard to tweeting “funding secured” – ruling that he had simply made an unfortunate mistake.
Something is lurking in the dark, waiting for its chance to strike. No one knows what it is, or where it came from, but everyone knows that
