Business

Elon Musk Wins Tesla Shareholder Lawsuit Over 2015 Tweet

Published

2 years ago

2023-02-03

Elon Musk has defeated a shareholder lawsuit alleging tweets claiming he had the “funding secured” to take Tesla private cost investors billions of dollars in losses.

The verdict was delivered on Friday in San Francisco federal court after a three-week trial, in a victory for the billionaire chief executive of the electric-vehicle maker. The nine-person jury took just under two hours to reach its decision, which was unanimous.

“The jury got it right,” Alex Spiro, a lawyer for Musk, said after the verdict.

Representing “thousands” of Tesla investors in the class action suit, lead attorney Nicholas Porritt had framed the case as an important test of rules and regulations for financial markets and society more broadly during closing arguments earlier on Friday in federal court.

“Rules that apply to everyone else should apply to Elon Musk,” Porritt said. “Elon Musk published false tweets, with reckless disregard to the truth, and those tweets caused investors harm. Lots of harm.”

He concluded: “All of corporate America is watching.”

Musk, who had taken the stand as a witness in the case, was in court during closing arguments. The case centered on his August 7, 2015, tweet declaring he was considering taking Tesla private at $420 a share and had funding secured to do so. It spun the shares, with Nasdaq temporarily halting trading in the electric vehicle company due to volatility.

During the trial, and again during the plaintiff’s closing argument on Friday, jurors were shown a chart detailing the leap in Tesla’s share price in the immediate aftermath of the contentious tweets. The stock jumped to $379.57 on the day of Musk’s tweet and later fell to $305.50 when it became clear the go-private move would not happen.

Elon Musk’s Tweet

While Musk had held discussions with Saudi Arabian investors to take the company private, no deal ever materialized. But Spiro said Musk had not misrepresented having funding and that raising the money needed was “not an issue”, since Musk’s shares in his company SpaceX could have been used to cover any shortfall.

Although Musk was serious about taking Tesla private and could have tapped enough funding to do so, the company did not go private because “shareholders wanted to stay public”, Spiro told the jury.

“That was his motive — to do what was right for the shareholders,” Spiro continued. “This was always for the shareholders.”

He added: “Ultimately, whatever you think of him, this isn’t the ‘bad tweeter’ trial. This is the ‘did this man commit fraud’ trial.”

Earlier in the trial, Spiro said the “funding secured” tweets were a “split-second decision” from Musk in response to an article the Financial Times was preparing to publish about Saudi Arabia’s Public Investment Fund building a $2bn stake in Tesla. Musk said he was concerned news of the go-private talks would leak.

Tesla Stock

The court has instructed jurors that it is to be assumed that Musk’s tweets were false. At issue was whether the actions caused material harm by misrepresenting the company’s position in a manner that might prompt a “reasonable investor” to buy or sell Tesla stock.

“When Elon tweets about Tesla, people listen,” Porritt said.

Jurors heard earlier in the trial from Glen Littleton, the lead plaintiff, that he interpreted the tweet to mean Tesla’s going private was “completely definite in my mind”.

Another investor, Tim Fries, bought Tesla stock at $380, believing the company would go private at $420, as Musk had suggested in his tweet. “I lost money,” Fries told the jury, saying Musk’s tweet “gave me the confidence” that his investment was sound.

Harvard Law School professor Guhan Subramanian, testifying on behalf of plaintiffs, described Musk’s handling of the matter as “incoherent” and an “extreme outlier” in corporate dealmaking.

The “funding secured” tweet has already proven costly for Musk. He and Tesla each paid $20mn to settle legal action from the Securities and Exchange Commission. Musk also had to resign as the carmaker’s chair, although he kept his position as chief executive.

Geoff Thomas

Geoff Thomas is a seasoned staff writer at VORNews, a reputable online publication. With his sharp writing skills and deep understanding of SEO, he consistently delivers high-quality, engaging content that resonates with readers. Thomas' articles are well-researched, informative, and written in a clear, concise style that keeps audiences hooked. His ability to craft compelling narratives while seamlessly incorporating relevant keywords has made him a valuable asset to the VORNews team.

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Business

Subsidies for Electric Vehicles Cut as Consumer Interest Fades

Published

4 days ago

2024-11-04

Geoff Thomas

Electric vehicles (EVs) are still considerably more expensive than traditional alternatives.

Pressure is building on Canada’s electric vehicle manufacturers, and several are rethinking their stance on E.V.s in favor of plug-in hybrids. Automobile manufacturers are now bracing themselves for an even more challenging era in the Canadian market for electric vehicles (E.V.s).

President Kristian Aquilina of General Motors Canada claims that support and expectations are misaligned because the Canadian government is reducing subsidies for electric vehicles while trying to phase out gas-powered cars.

Manufacturers find pushing for an all-electric future in Canada increasingly difficult due to fewer consumer financial incentives and increasingly strict sales targets.

With subsidies totaling up to C$12,000 (about $8,500), Canadian consumers may save a tonne of money on electric automobiles. The federal government offers a rebate of up to $5,000 Canadian, and the provinces of Quebec and British Columbia provide further incentives of up to $7,000 and $4,000, respectively.

Ford lost about 2,000 US for every EV it sold in the first three months of the year.

Ford lost about $132,000 US for every E.V. it sold in the first three months of the year.

Ontario, which eliminated rebates in 2018, had the lowest market share for electric vehicles compared to Quebec and British Columbia, two regions that offered bigger incentives and thereby drove E.V. adoption in Canada.

Although this backing is dwindling, the province of Quebec has now declared that all subsidies will end in 2027. In June, the British Columbia government restricted incentives to a smaller subset of E.V. purchasers for “available funding” and higher-than-expected E.V. sales growth.

These reductions indicate a larger pattern: provincial governments reevaluate the sustainability of taxpayer-financed incentives for E.V.s as budget deficits widen.

With lofty goals to cut pollution from gas-powered cars and increase sales of electric vehicles, the Canadian government has reduced subsidies for these vehicles. Electric or plug-in hybrid vehicles will be mandatory for all new light-duty vehicle sales in Canada by 2035.

B.C. needs to step up with incentives for consumers to buy used EVs, some opposition critics say.

Some opposition critics say that B.C. needs to step up with incentives for consumers to buy used E.V.s.

To meet our intermediate goals, 20% of new sales must be electric vehicles (E.V.s) by 2026 and 60% by 2030. Car companies are already under a lot of pressure due to dwindling incentives and increasing demands, and the clock is ticking faster by the second.

In addition, these rules impose new forms of responsibility. Automakers that do not reach their provincial sales targets may be subject to financial fines imposed by provinces such as British Columbia.

Canadian manufacturers are already under financial pressure from federal compliance credit system standards, which they must meet or face deficits. This system gives them credit for electric vehicle sales and infrastructure improvements, but it’s not without its challenges.

“The timing is not necessarily lining up very well, in that the purchase incentive support comes off just as mandates and regulations start to bite,” GMC Canada President Kristian Aquilina told Bloomberg. “It must make a difference.

Therefore, we must consider that. Despite the cutbacks, Aquilina argued that the government’s investment in enhancing the charging infrastructure could benefit E.V. sales.

Tesla Sales Fall As More Electric Vehicles Crowd the Market

Tesla Sales Fall Again As More Automakers Crowd Electric Vehicle Market

Geoff Thomas

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Business

Chewy Slides After Filing Shows 3rd-Biggest Shareholder, ‘Roaring Kitty,’ Sold His Stake

Published

1 week ago

2024-10-30

Kiara Grace

Washington — Chewy shares fell about 2% overnight Wednesday after a regulatory filing showed that Roaring Kitty, a meme stock trader, sold his interest in the online pet retailer.

According to a beneficial ownership document filed with the Securities and Exchange Commission on Tuesday, Roaring Kitty, whose legal name is Keith Gill, sold all his Chewy shares, totaling 6.6% of the company.

Chewy Slides After Filing Shows Third-Biggest Shareholder, ‘Roaring Kitty,’ Sold His Stake

Plantation, Florida-based Chewy dropped 1.9% after hours to $26.19 per share.

Gill, an investor at the core of the meme stock craze, bought more than 9 million shares of Chewy in July, making him the company’s third-largest stakeholder.

Gill built a name for himself in 2021 by rallying ordinary investors around GameStop. At the time, the video game shop was fighting to stay in business, and major Wall Street hedge funds and investors were betting against it or shorting the stock. But Gill and those who agreed with him altered GameStop’s direction by purchasing thousands of shares despite practically all acknowledged criteria indicating that the firm was in deep peril.

Chewy Slides After Filing Shows Third-Biggest Shareholder, ‘Roaring Kitty,’ Sold His Stake

That triggered what is known as a “short squeeze,” in which large investors who had bet on GameStop were obliged to buy its swiftly increasing stock to offset significant losses.

Gill has expressed confidence in GameStop Chairman and CEO Ryan Cohen’s ability to revamp the company following his success at Chewy. Cohen cofounded Chewy in 2011 and stepped down as CEO in 2018.

SOURCE | AP

Kiara Grace

Kiara Grace is a staff writer at VORNews, a reputable online publication. Her writing focuses on technology trends, particularly in the realm of consumer electronics and software. With a keen eye for detail and a knack for breaking down complex topics. Kiara delivers insightful analyses that resonate with tech enthusiasts and casual readers alike. Her articles strike a balance between in-depth coverage and accessibility, making them a go-to resource for anyone seeking to stay informed about the latest innovations shaping our digital world.

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Business

Canada CBC News CEO Catherine Tait Recalled to Parliamentary Committee

Published

1 week ago

2024-10-30

Geoff Thomas

Catherine Tait won't rule out taking bonus once she leaves CBC/Radio-Canada

Canada CBC News reports that MPs have voted to recall CBC CEO Catherine Tait to a Commons committee for questioning, only a week after her last appearance, over the awarding of $18 million in bonuses to Canada CBC news executives.

The Conservatives, the Bloc Québécois, and the NDP joined forces to re-invite Ms. Tait, her successor Marie-Philippe Bouchard, and Heritage Minister Pascale St-Onge to appear before the Commons Heritage Committee.

Ms. Tait, who will relinquish her position as CEO and president of CBC/Radio Canada in January, addressed the committee last week. The House of Commons has passed a motion recalling her before the conclusion of her term, and she is now subject to an additional two hours of interrogation, which includes inquiries regarding bonuses.

MPs also resolved to summon Quebec broadcasting executive Marie-Philippe Bouchard, appointed as the new chief of CBC/Radio-Canada last week, to appear before she begins her new job following a House of Commons chamber debate.

Catherine Tait Exit Package

Catherine Tait rejected the Conservatives’ requests to deny an exit package, including bonuses, when she departed the position in January during last week’s committee hearing.

She also defended the award of $18.4 million in incentives to 1,194 staff members for the 2023-2024 fiscal year, which concluded in March, following the broadcaster’s achievement of performance indicators.

Kevin Waugh, a Conservative committee member who introduced the motion, stated that his party aimed to ensure Ms. Tait was “accountable to taxpayers” before her departure in January.

He informed The Globe and Mail that “Canadians are dissatisfied with the bonuses” and that Catherine Tait‘s exit package, which will not be disclosed, is a cause for concern.

“I am apprehensive that she has not received her bonuses in over two years, and that the Minister of Heritage or Privy Council will lavish her with bonuses when she departs in January,” he stated.

The Liberals opposed a portion of the motion that claimed that “the Liberal threat to cut funding” had resulted in the elimination of hundreds of jobs at CBC/Radio-Canada.

Defunding CBC News Canada

The Heritage Minister informed The Globe that the claim was “hypocritical,” as the Conservatives intended to completely defund CBC.

“The Conservatives’ actions today are a clear example of hypocrisy.” Ms. St-Onge stated that performance bonuses increased by 65% during the Harper Conservatives’ tenure, while CBC News Atlantic Canada experienced substantial budget cutbacks.

“As a government, we do not require any lessons from a party that has pledged to reduce the funding of CBC/Radio-Canada and the 8,000 jobs associated with it during its campaign.”

During the Tuesday debate, NDP MP Niki Ashton stated that her party endorses the “banning of executive bonuses” at CBC News Atlantic Canada but is opposed to “the Conservatives’ full frontal attack” on the broadcaster.

She stated, “We require a robust public broadcaster, but not one that distributes executive bonuses and eliminates positions.”

If the Conservatives establish the next government, they intend to deprive the CBC of public funding while maintaining French services.

Catherine Tait defended CBC and rebuffed MPs’ assaults during last week’s committee hearing. “It is evident that the members of this committee are making a concerted effort to discredit the organization and vilify me,” she stated.