TSLA Stock Soars as Elon Musk Stands Trial for ‘Funding Secured’ Tweets

  • Tesla (TSLA) CEO Elon Musk is set to stand trial for his 2018 “funding secured” tweets.
  • Jury selection starts today, with the trial expected to last three weeks.
  • While signifiant implications for TSLA stock abound, the market appears to be brushing this trial off today.
TSLA stock - TSLA Stock Soars as Elon Musk Stands Trial for ‘Funding Secured’ Tweets

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Today’s the day. Tesla (NASDAQ:TSLA) CEO Elon Musk’s trial in San Francisco has kicked off. It focuses on whether the executive’s “funding secured” tweet effectively amounted to securities fraud, costing shareholders in the company billions of dollars. Interestingly, shares of TSLA stock have surged roughly 7% higher during this session as investors seemingly brush off yet another trial case for Musk.

This trial is expected to last three weeks and is kicking off today with jury selection. But make no mistake, it could be a pivotal moment for Musk, who has been embroiled in other legal issues which culminated in a trial in the past.

There was a defamation suit brought against Musk by Vernon Unsworth for calling him a “pedo guy” on Twitter. Then there was the lawsuit over Tesla’s acquisition of SolarCity, alleging Musk enriched his family members and friends at the expense of shareholders. Twitter, now a Musk property, has also been sued over alleged failure to provide proper notice of termination and allegedly refusing to honor previously-agreed-to vendor contracts.

Musk has beat all these charges. Let’s dive into whether much of the same is in order for Elon Musk with this latest trial.

TSLA Stock Soars, Despite Yet Another Legal Battle

The market seems to think Elon Musk’s teflon-like nature when it comes to legal battles will hold true yet again. Today’s price action for TSLA stock greatly outpaces the market, which is hovering around the flatline in today’s session.

This lawsuit, like so many others brought against Elon Musk, could significantly impact Tesla’s share price. That’s because uncertainty with respect to the ruling and its potential implications for Musk could have adverse effects for shareholders. The ultimate ramifications of a negative outcome in this case remain uncertain. But given Musk’s declining popularity among much of Tesla’s left-leaning consumer base, it’s clear another hit to brand value is not what TSLA shareholders need right now.

Notably, a previous Securities and Exchange Commission (SEC) investigation into this tweet resulted in a settlement. Tesla and Musk both split a $40 million fine, settling the SEC’s concerns, and Musk was forced to relinquish his chairman role for at least three years. Thus, perhaps the jury will view this matter as settled, considering nothing really changed after the SEC slapped Musk on the wrist already.

Whether Musk really did have “funding secured” or was simply playing games with shareholders in an attempt to boost Tesla’s stock price doesn’t seem to matter today. The question is whether this will remain the case in three weeks’ time.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

Article printed from InvestorPlace Media, https://investorplace.com/2023/01/tsla-stock-soars-as-elon-musk-stands-trial-for-funding-secured-tweets/.

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