The Twitter purchase has surely affected Elon Musk. The historic $44 billion purchase has entailed many reformations to the microblogging site. Even before purchasing the platform when he was one of the biggest shareholders, he hinted at the changes. But, the deal was not a smooth sail for the billionaire. There were many hurdles including the company filing a lawsuit against him. So, in October 2022, he bought Twitter through self-financing and equity financing from different stakeholders.
To complete the deal, he sold the majority of his Tesla stocks valued at billions of dollars. But, the new venture has led to reflection on his electric vehicle venture, Tesla. The shareholders are fuming and unhappy with Tesla’s performance. Along with the shareholders, the customers have also expressed their discontent. But, one of the major setbacks that Musk received, which is still looming over him, is the four years old lawsuit. Elon assured that Tesla is ready to take Tesla private, which caused uproar in the market, but it was an inflated claim without any truth to it. So, right before the trial, he is urging the trial to shift to Tesla’s headquarters, in Texas.
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Elon Musk Fears An ‘Unfair’ Trial In San Francisco
In 2018, Elon Musk’s claim about Tesla’s readiness to take the electric vehicle business private was deemed false. The Tesla owner took it to Twitter that he has secured funding to take Tesla private. He told the shareholders that they can sell the Tesla shares at $420 or hold them till it gets private. This led to volatility in the price of Twitter, causing false inflation. But, the shareholders lost heavy money, and they filed a lawsuit against him. The Federal Court in California and the Securities and Exchange Commission falsified the claims.
Shareholders could either to sell at 420 or hold shares & go private
— Elon Musk (@elonmusk) August 7, 2018
The trial is all set to begin in California on January 17th, 2023. But, Elon Musk is now requesting the Federal Court Judge to transfer the trial to Texas, the formal base of Tesla. There were allegations that to evade the heavy taxes that the Biden administration is imposing on the wealthy CEOs, Musk shifted Tesla, to avoid state taxes, to Austin, Texas.
In a court filing, the defendant’s lawyer, Alex Spiro asked the court to at least postpone the trial if not shift it. He said, “For the last several months, the local media have saturated this district with biased and negative stories about Mr. Musk”. The Twitter changes have been receiving heavy media coverage, which is not very positive.
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The Federal Court Penalized Tesla And Elon Musk Heavily
The Securities and Exchange Commission charged Tesla and Elon Musk with heavy penalties. Musk had to resign from the Chairman position on the Board of Tesla, and they faced financial penalties. The two had to separately pay $20 million as penalties. There were many discrepancies in the Tweet that Elon Musk posted in August 2018.
The first one was that there were many loopholes and uncertainties about taking Tesla private. He did not discuss the details of the potential decision with the shareholders keeping them in the dark. It was factually baseless. The microblogging app became the haven for Tesla’s informational launch pad, but nothing specific was mentioned, and the announcement disrupted the market. The shareholders won the case and the jurors will be appointed to scrutinize it in a court of law on January 17th, 2023.
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