Tesla CEO, Elon Musk was not found guilty of fraud over the Tesla tweet. He has been cleared of wrongdoing for a tweet. Musk was accused of misleading investors through a tweet where he had said that he had ‘’funding secured’’ to take back carmaker Tesla into private ownership.
A US jury found that the CEO and his company were not liable for misled through tweets in 2018. The CEO appreciate the decision of the jury and said in a tweet, ‘’ Thank goodness, the wisdom of the people has prevailed.’’
Tesla Shares rose to 1.6% in after-hour trading
Following the verdict, shares of Tesla rose 1.6% in after-hours trading.”A dark chapter is now closed for Musk and Tesla,” Wedbush analyst Dan Ives said. Ives added that some Tesla investors feared Musk might have to sell more Tesla stock if he lost.
Meanwhile, Nicholas Porrit, a lawyer for the investors, said in a statement, “we are disappointed with the verdict and are considering next steps.”
I tweet something does not mean people believe it
According to the Economist, investors lose as high as $12bn after making decisions based on the tweet. The US Securities and Exchange Commission (SEC) sued Musk over his tweet. Also, Musk stepped down as Tesla board Chairman and settled for almost $20m.
Talking about the tweet Musk said that “Just because I tweet something does not mean people believe it or will act accordingly.”Shareholders had argued that “funding secured” suggested more than a verbal agreement.
Moreover, Musk’s lawyer Alex Spiro said that the ‘’funding secured’’ tweet was technically inaccurate but only investors cared that Musk is considering buyout. He adds, “The whole case is built on bad word choice,” he said. “Who cares about bad word choice?”
“Just because it’s a bad tweet doesn’t make it fraud.”
