Tesla CEO Elon Musk is accused of profiting $7.5 billion from insider trades by a shareholder who claims Musk knew about disappointing production and delivery numbers before they went public.
Tesla CEO Elon Musk was accused of insider trading in a lawsuit filed Thursday by a Tesla shareholder in Delaware Chancery Court. Shareholder Michael Perry claims in the filing that Musk sold over $7.5 billion of shares of his electric car company in late 2022 before potentially disappointing production and delivery numbers were made public. Perry said Tesla's stock took a nose dive after the company's fourth-quarter numbers went public on Jan.
The lawsuit says Musk sold the shares on various dates in November 2022 and December 2022. Perry also accused Tesla's directors of breaching their fiduciary duty by allowing Musk to sell the shares. Musk and Tesla did not immediately respond to Fox Business' request for comment.
When Tesla announced it would discount vehicle prices and released the data in January, analysts raised concerns that the company's cars weren't in demand, and Tesla's stock price dropped. "Had waited to make these sales until after the release of material adverse news ... his sales would have netted him less than 55% of the amounts realized from his November and December 2022 sales," the lawsuit said.
Musk responded to the ruling by pushing for Tesla to change its state of incorporation from Delaware to Texas, which is another item that is being presented to shareholders for them to vote on at the annual meeting. Musk also faces a Securities and Exchange Commission probe into his 2022 acquisition of Twitter, the social media platform he rebranded as X. Musk has said the SEC is trying to "harass" him with undeserved investigations.
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