Musk spent three weeks unsuccessfully attempting to convince investors that he was unaware that about to break a potential rule banning shareholders from trading in a stock while the company conducts a sale, whether or not the company itself was doing it.
Model 3 launch event – July, 2018
“He fired off, not once, not twice, not three, not four, not five, not six,” said William Patterson, a corporate governance expert and professor at Rutgers University’s business school. “It’s seven tweets, and they’re not even for his personal use.”
The tweets in question were sent out to just over 220,000 followers on Sept. 26, 2018.
“Can someone buy all the [Tesla] shares I have left so I can sell them all and make a quick buck?” Musk tweeted.
“Am considering taking Tesla private at $420. Funding secured,” he later tweeted.
Experts have identified a problem with Musk’s behaviour. (Reuters)
The Securities and Exchange Commission launched an investigation shortly after the tweets were published. In November, Musk, who also has a penchant for bitcoin speculation, admitted to violating securities law and offering “false and misleading” statements. He later stated that the tweet was a mistake.
Corporate governance experts called the investigation into Musk’s behavior “by far the most egregious example of market manipulation in the entirety of my career.”
A team of corporate governance experts have recommended that Tesla shareholders declare their support for an independent chair at the company. Musk would continue to serve as chief executive.
Tesla, which has struggled with profitability, may soon issue a secondary public offering, according to The Wall Street Journal.
Model 3 Model 2 production ramp-up
“Trying to prevent that is actually quite difficult,” said James Cox, a professor of corporate law at Duke University, who added that there may be some wiggle room in the rules governing Musk’s tweets, but that they still fell short of the textbook definition of insider trading.
“It is OK as long as you provide some evidence that you weren’t taking an honest trading decision,” Cox said.
Model 3 Model 3 S Tesla Model 3 Model 3 Model 3 Model 3 Model 3 Model 3 Model 3 Model 3
Tesla’s owners association in Southern California defended the CEO’s over-the-top predictions.
“Musk proved that he was an incredibly creative CEO,” said Elma Alvarez, a Tesla owner from Hemet. “A few short months later, that he still has a lot of dedication to his company and to his fans.”
These illustrations were provided by Ms. Alvarez, the Tesla Model 3 owner in Hemet, CA.