Elon Musk’s problems are getting worse: trial related to his tweets towards Tesla
Elon Musk’s problems are getting worse: trial related to his tweets towards Tesla
Elon Musk, the troubled billionaire, is now in court for a company he did not take private and is still dealing with the repercussions of one he did. Musk had his sights set on Tesla, the electric car company where he continues to act as CEO and where he derives the prevalence of his income and fame, long before he bought Twitter for $44 billion in October.
Musk revealed in a tweet on August 7, 2018, that he had confirmed finance for a $72 billion acquisition of Tesla. He later emphasised this assertion in a statement that suggested a deal was close at hand.
But since the buyout never took place, Musk must now testify under oath in a federal courtroom in San Francisco to justify his actions. The trial was sparked by a class-action lawsuit brought on behalf of investors who owned Tesla stock for 10 days in August 2018; jury selection will start on Tuesday.
A week later, as it became clear that Musk lacked the financing for a buyout after all, the spike in Tesla’s stock price that had been fueled by his tweets at the time unexpectedly came to an end. His attempt to take the automaker private was ultimately dumped as a result, and he was forced to quit as chairman of the trade as part of a $40 million deal with US securities regulators.
Since then, Musk has argued that he was coerced into making that payment and has maintained that during conversations with officials of Saudi Arabia’s Public Investment Fund, he thought he had confirmed funding for a takeover of Tesla.
The jury’s understanding of Musk’s motivation for tweets that US District Judge Edward Chen has hitherto ruled was untrue might choose the trial’s outcome.
On Friday, Chen handed Musk another setback by rejecting his request to relocate the trial to a federal court in Texas, where Tesla would be relocating its headquarters in 2021. Musk has contended that the jury pool in the San Francisco Bay Area of California was polluted by negative coverage around his purchase of Twitter.
Wide variety
Musk’s management of Twitter, where he has stopped the staff and alienated users and advertisers, has not gone down well with Tesla’s existing owners, who are concerned that he has been spending less time managing the manufacturer at a time of escalating competition.
In contrast to the $14 billion swing in fortune that happened between the company’s high and low stock prices during the period covered by the class-action lawsuit, those concerns played a role in the 65 per cent decline in Tesla’s stock last year that destroyed more than $700 billion in shareholder wealth.
The basis of the complaint is the idea that if Musk had not raised the prospect of buying the firm for $420 per share, Tesla’s shares would not have fluctuated so much. Since then, there have been two splits in Tesla’s stock, making the $420 price now only worth $28 on an altered basis. The shares dropped from their split-adjusted top of $414.50 in November 2021 last week, closing at $122.40.
Car sales swiftly rebounded once Tesla fixed a display problem after Musk gave up on the notion of a takeover, sending the company’s stock surging and making Musk the richest man in the world up until he bought Twitter. Musk lost the top spot on the wealth list when the stock market reacted poorly to his management of Twitter.
The trial may shed light on Musk’s management style given that some of Tesla’s current and former senior managers and board members, including luminaries like Oracle co-founder Larry Ellison and James Murdoch, the son of media magnate Rupert Murdoch, are registered as evidence.
The trial, which is anticipated to go until February 1, might also call into question Musk’s relationship with his brother Kimbal, who is also on the list of potential witnesses that could be called. The trial is scheduled to go on until February 1st.
Elon Musk Struggles To Pay Rent As A 27-Hour Fire Sale On Twitter
Would you like to purchase a neon sign bearing the emblem of Twitter Inc. or an espresso maker that was once in use by the company? Supporters of the social networking site will be able to buy them in a fire sale that starts on Tuesday.
The 27-hour online auction that Heritage Global Partners Inc. held provided proof that the $44 billion corporation that billionaire Elon Musk purchased last year was adjusting.
The 631 lots of “extra corporate office assets” include everything from typical items like desks and whiteboards and large-scale industrial kitchenware to uncommon items for workplace auctions like funny signage and more than 100 boxes of KN95 masks. There is also a choice of upscale chairs, coffee makers, iMacs, and stationary bike stations with electrical platform accessibility.
The majority of the items garnered starting bids of $25, including a large figurine of a Twitter bird and a planter with the @ symbol. After 64 bids and almost 20 hours of the auction remaining, the neon logo was valued at $17,500, making it the lot with the highest current price.
A total of 55 bids brought the bird statue’s price to $16,000, while 52 bids brought the “@” sculpture’s price to $4,100. According to the organisers, the sale is not designed to help Twitter’s financial situation.
Last month, a Heritage Global Partners spokesman told Fortune magazine that “this auction has nothing to do with their financial situation.” Outside of regular business hours, questions were not quickly answered by the auction company.
Musk, who is trying to cut costs at the business drastically and has failed to pay the rent for another San Francisco property, which has resulted in a lawsuit, is sure to receive more money. The personnel there has been asked to vacate and work from home. Other offices, notably its Asia-Pacific base in Singapore, have not been spared.
edited and proofread by nikita sharma
