A U.S. appeals court has upheld the ruling that cleared Elon Musk and Tesla of liability concerning Musk’s 2018 “funding secured” tweet, leading to a surge in Tesla stock following Donald Trump’s election win.
By Ronny Mugendi
Court Clears Musk and Tesla of Misleading Investors; Trump’s Influence on the Rise?
Key Points
- A U.S. appeals court confirmed Musk and Tesla’s lack of liability over the “funding secured” tweet from 2018.
- Tesla’s stock jumped by 15% after Trump’s presidential victory, adding $15 billion to Musk’s net worth.
- With Trump’s potential to ease regulatory pressures, Musk’s companies could benefit from reduced scrutiny.
The recent appeals court decision backed a jury’s original verdict, dismissing investor claims that Musk’s 2018 tweet about taking Tesla private with “funding secured” misled shareholders and led to financial losses. Initially, investor Glen Littleton had filed the lawsuit, alleging that Musk’s statements were misleading.
This legal victory comes amid expectations that Trump’s win could create a more favorable regulatory climate for Musk’s businesses, given Musk’s vocal support for Trump’s presidency.
Tesla and Musk Cleared of Investor Allegations in “Funding Secured” Appeal
The appeals court dismissed an investor appeal, maintaining the original ruling in favor of Musk and Tesla. Investors argued that Musk’s statement about securing funds at $420 per share misled the market, sparking a series of lawsuits. However, the court upheld the jury’s finding that while the tweet might have been reckless, it was not conclusively misleading.
Musk celebrated the ruling on social media, writing, “Justice prevails. Meanwhile, none of the short sellers who repeatedly manipulated Tesla stock have faced prosecution.”
Trump’s Victory Spurs Positive Market Reaction
Following Trump’s election victory, Tesla shares rose by 15%, boosted by Musk’s public endorsement and significant campaign contributions totaling approximately $130 million. Trump praised Musk at a recent event, calling him a “star” for his role in supporting the campaign. This market increase has added around $15 billion to Musk’s wealth.
Analysts suggest that with Trump in office, Musk’s companies, including Tesla, SpaceX, and X, may face reduced regulatory scrutiny, possibly easing several ongoing federal investigations. Ripple’s Chief Legal Officer Stuart Alderoty highlighted how Trump’s administration could reshape the regulatory approach, potentially curbing the SEC’s enforcement actions and positioning the U.S. as a leader in crypto.
Musk’s ongoing support for Dogecoin has also sparked speculation, with some analysts predicting DOGE could reach $4, given Musk’s involvement in efficiency initiatives under the “D.O.G.E.” program.
