Steven Elek, a data analyst for Consumer Reports, said in a statement, “Build quality continues to be an issue for Tesla. A TikTok video documenting the build quality of one Tesla, including a wobbling trunk lid, picked up more than 4 million views earlier this month. The challenge is so significant that GM claimed in a recent investor presentation that its dealers had apparently repaired more than 11,000 Tesla vehicles since last year. Repairing Teslas remains a major hurdle, as a Recode investigation illuminated this past summer. Build quality has been a consistent criticism of Tesla, and a reliability study published by Consumer Reports this month found that the company continues to have issues with its body hardware and steering systems, among other issues. The cars themselves are having problems, too. (The lawsuit also calls Musk a “ part-time CEO.”) Several lawsuits have been filed against the company related to its workplace, including lawsuits alleging sexual harassment, racism, and a “ toxic” workplace culture, over the past year or so. At the same time, Tesla is currently facing a lawsuit that alleges that Musk’s compensation package in 2018 was inappropriately influenced by the Tesla board’s personal ties to Musk. Keep in mind that Musk also financed much of his Twitter acquisition deal by selling off his own Tesla stock, and also reportedly authorized more than 50 engineers from Tesla to work at Twitter when he took over last month. In the wake of his Twitter acquisition, some experts and analysts are concerned that Musk’s new job might be undermining his responsibilities as CEO of Tesla and contributing to its cratering stock price. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.įor more newsletters, check out our newsletters page. Twitter CEO Parag Agrawal did not explain the turnabout beyond saying in a tweet that it was "for the best," and that "there will be distractions ahead.By submitting your email, you agree to our Terms and Privacy Notice. The lawsuit is the latest drama involving Twitter and Musk, who, in a dizzying reversal, said he would not be joining Twitter's board less than a week after he said publicly that he was offered a seat. Rasella's suit is seeking unspecified damages. "Plaintiff and the Class would not have sold Twitter's securities at the price sold, or at all, if they had been aware that the market prices had been artificially and falsely deflated by Defendant's misleading statements," wrote Manhattan-based lawyer Jeffrey Block, who is representing Rasella. Musk is the richest person in the world.īut while the moves may have been a moneymaker for Musk on paper, Twitter shareholders who sold stock during the time period in question were doing so at a artificially low price, the suit says. Musk "knew or recklessly disregarded" that he had an obligation to file paperwork with the SEC, according to the suit, which estimates that the delayed filings saved Musk about $143 million, or a tiny fraction of his wealth. Musk, according to the suit, "made materially false and misleading statements and omissions by failing to disclose to investors that he had acquired a 5% ownership stake in Twitter as required." In his lawsuit, Rasella said by not giving federal regulators a heads-up that he was gobbling up Twitter stock, Musk was essentially able to buy Twitter stock at a discount. Musk did not return a request for comment. Under securities laws, Musk was supposed to alert the Securities and Exchange Commission within 10 days after purchasing 5% or more of Twitter's stock.īut Musk did not file his SEC paperwork until April 4, or 11 days after he was supposed to, and by that point, Musk had amassed a more than 9% stake in the social media company, becoming its largest shareholder for the price of about $2.6 billion. He argues that because Musk waited days to declare his purchase of Twitter stock, he depressed the share price and ripped off others who sold Twitter stock. Marc Bain Rasella filed the suit in federal court in New York and seeks to represent all investors who sold Twitter stock between March 24 and April 1. Tesla CEO Elon Musk introduces the Cybertruck at Tesla's design studio.Ī Twitter shareholder on Tuesday filed a securities fraud lawsuit against Elon Musk, alleging that the billionaire Tesla CEO's late disclosure of his stake in Twitter cost investors money and saved Musk around $143 million.
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