Tesla CEO Elon Musk’s infamous tweet on Aug. 7, 2018, cost him and his company a combined $40 million and forced Musk to temporarily step down as chairman of the electric vehicle company in a settlement with the Securities and Exchange Commission.
“Am considering taking Tesla private at $420. Funding secured.” Musk tweeted on Aug. 7, 2018.
Days later on on Aug. 10, 2018, investors sued Musk and Tesla alleging the statement that the company had the necessary funding to take the company private was fraudulent and that Musk and Tesla were artificially manipulating the price of Tesla stock “to completely decimate the company’s short-sellers.”
Musk offered testimony in the lawsuit trial on June 20, claiming his tweets are not directly linked to Tesla’s stock price.
“Just because I tweet something does not mean people believe it or will act accordingly,” Musk testified.
Elon Musk Lawsuit Prompts Cramer Opinion
Musk’s comment spurred discussion on Monday’s “Squawk on the Street”on CNBC with Jim Cramer, David Faber and Carl Quintanilla on whether tweets on Twitter are material and should be take seriously.
“His flip nature doesn’t fly within the court of law. Flip nature means exactly what I just heard from you, which is like are you kidding me, go get a real lawyer,” Cramer said.
Twitter is considered material, Cramer continued.
“Twitter is recognized as a legitimate news service,” he said. “And so, therefore, Carl, when you post something on Twitter, as much as you think Twitter may be the palce where people battle over who’s better, the Niners or the Eagles, it’s also a news breaking center and I think a flip man may just say, ‘you know what, I can say what I want. That’s not what I care about. I’m above what I guess would be the law.”
Faber asked if regulators have not demonstrated a view that the tweet is material information that crosses the line. Cramer added that the SEC said that they didn’t want to take on Musk, and the Justice Department chose to look the other way.
Source: https://www.thestreet.com/automotive/jim-cramer-picks-a-side-on-debate-over-elon-musks-infamous-tweet?puc=yahoo&cm_ven=YAHOO&yptr=yahoo