A U.S. appeals court recently upheld a jury’s decision that cleared Elon Musk and Tesla of liability over Musk’s 2018 tweet claiming “funding secured” for taking Tesla private. The tweet, which led to intense volatility in Tesla’s stock, drew accusations from investors that Musk’s statement caused financial losses for shareholders. The lawsuit, initially brought by investor Glen Littleton, claimed Musk’s tweet was misleading and harmful to investors.
The decision comes when Musk’s public support for Donald Trump’s recent presidential victory is fueling expectations for a potentially favorable regulatory environment for Musk’s ventures.
Tesla and Elon Musk Cleared in Appeal Over “Funding Secured” Tweet
In a recent legal victory, a U.S. appeals court dismissed an appeal by Tesla investors regarding Elon Musk‘s 2018 “funding secured” tweet. The tweet, which suggested Musk had the necessary financial backing to take Tesla private at $420 per share, resulted in stock market reactions. Consequently, shareholders filed lawsuits and argued the statement misled the market.
While the initial trial ended in favor of Musk, the plaintiffs appealed, claiming that the jury had not received adequate instruction on assessing Musk’s statements.
However, the appeals court acknowledged that the 2018 tweet may have been reckless but upheld the jury’s decision, supporting the view that it was not conclusively misleading. The ruling provides Elon Musk and Tesla with legal relief closing a multi-year legal dispute.
The Tesla CEO celebrated the decision in an X post stating,
“Justice prevails. Meanwhile, none of the many short sellers who egregiously manipulated Tesla stock for years and lied repeatedly on TV has been prosecuted. Not one.”
Donald Trump Support Yields Positive Stock Movement
With Elon Musk openly supporting Donald Trump in the 2024 US election, Tesla shares saw a 15% increase following his victory. Musk contributed around $130 million to pro-Trump campaign efforts, including initiatives to increase voter turnout in key states. His endorsement and financial backing have positioned Musk as a key ally to the president-elect, fostering optimism around Tesla’s market performance.
During a recent event, Trump praised Musk, calling him a “star” and recognizing his efforts in promoting the campaign. For Tesla, the increase in stock value has been notable, adding around $15 billion to Elon Musk’s wealth.
More so, with Trump set to take office, analysts speculate that Elon Musk’s businesses, including Tesla, SpaceX, and X could experience a more lenient regulatory environment. Donald Trump’s government might reduce regulatory oversight on Musk’s companies, which currently face several federal investigations.
Additionally, Ripple CLO Stuart Alderoty emphasized how Donald Trump’s approach could shift the regulatory landscape by curbing the SEC’s enforcement tactics. Alderoty noted that the US has a unique chance to position itself as the global leader in the crypto industry.
Adding to Musk’s financial impact, his continued support for Dogecoin has led some analysts to predict a potential DOGE price increase to $4. According to reports, Dogecoin will benefit from Musk’s involvement in government efficiency initiatives, known as “D.O.G.E.”
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