A Tesla investor named Michael Perry said Elon Musk used secret information about Tesla to sell $7.5 billion of Tesla stock in 2022. Perry filed a lawsuit on Thursday in Delaware Chancery Court.
Perry said Musk knew Tesla wouldn’t meet its goals for the fourth quarter of 2022 in delivering cars. Musk sold $7,530,113,926 of Tesla stock in November and December 2022 before Tesla told everyone about the financial report in January 2023.
If Musk had sold the stock after the financial report, he would’ve made less money, Perry said.
The lawsuit said Musk made about $3 billion from selling the stock.
Lawyers for Perry and Musk didn’t say anything right away about the lawsuit.
Perry thinks Musk must’ve had information about Tesla that other people didn’t know about. That’s why Musk sold the stock, Perry said.
The lawsuit mentioned things Musk said during an earnings call in 2023. Musk talked about Tesla having updates every day about how many cars were ordered and made. Perry said that showed Musk had secret information about how many cars Tesla was making and delivering.
The lawsuit also said Tesla changed how it made and delivered cars around the time Musk sold the stock. Perry said that made it more likely Musk had secret information about how many cars Tesla was making and delivering.
Perry also said Musk lied to investors during an earnings call in October 2022. Musk said the fourth quarter of 2022 would be really good for Tesla. He said Tesla had lots of people wanting to buy cars and would sell every car it made.
Investors can sue a company’s bosses if they think the bosses did something wrong.
In 2001, Larry Ellison, the CEO of Oracle, was accused of selling almost $900 million of shares before Oracle said it wouldn’t meet its goals for making money, The New York Times said. Ellison settled and agreed to give $100 million to charity.
James Park, an expert in securities regulations, said these lawsuits happen a lot but usually get thrown out quickly.
Last year, a group of investors sued Musk, saying he made the price of Dogecoin, a cryptocurrency, go up and down on purpose.
Musk is also fighting to keep a $55 billion pay deal. The chancellor of the Delaware Chancery Court said no to the deal in January. She’ll also look at Perry’s lawsuit.
Because the pay deal didn’t happen, lots of people want Tesla investors to say no to giving Musk the money. Investors will vote on that and on if Tesla should move from Delaware to Texas on June 13.
