A number of Tesla investors are suing company chief executive Elon Musk over his recent tweets.
Bloomberg reports that a handful of institutional investors in the electric automaker filed a lawsuit in Delaware Chancery Court aiming to permanently block Musk’s “unchecked use of Twitter to make inaccurate statements about the company,” a lawyer from the Laborers’ District Council and Contractors’ Pension Fund of Ohio said.
After Musk infamously (and falsely) tweeted that he had the necessary funding to take Tesla private in August last year, the executive reached a settlement with the Securities and Exchange Commission. One of the stipulations of this settlement was for Tesla to oversee all of Musk’s future tweets to ensure they had no impact on the car manufacturer’s stock price.
Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k.
— Elon Musk (@elonmusk) February 20, 2019
Musk appeared to defy this settlement in February when he tweeted that Tesla was on track to build 500,000 vehicles this year.
On February 19, Musk tweeted that “Tesla made 0 cars in 2011, but will make around 500k in 2019.” He later corrected that tweet stating “Meant to say annualized production rate at end of 2019 probably around 500k, i.e. 10k cars/week. Deliveries for year still estimated to be about 400k.”
Tesla admitted in a court filing that Musk hadn’t received approval for these tweets, triggering the SEC to ask a federal judge to hold Musk in contempt of violating his SEC settlement.
“Mr. Musk has continually disregarded all efforts to rein in his material misstatements on social media,” attorney for the Laborers’ District Council Michael Barry said about the new suit.
