Elon Musk is sued by shareholders over delay in disclosing Twitter stake | Hacker News Reader

Elon Musk is sued by shareholders over delay in disclosing Twitter stake

reuters.com

10 pointsHWR_1410 comments

The person starting the class action lawsuit claims they lost $350. The $10/share Twitter appreciated after Musk disclosed times 35 shares sold between when Musk was supposed to file and when he did. Honestly, I wonder if Musk wouldn't just agree to the extra $10/share for everyone for the four days of purchasing. It's not like the extra few hundred million would be worth the time in court. Well, to him. I'd gladly spend a year or two in court for a few hundred million.

Musk' companies regularly engage in anti labour practices [0] to save a couple of dollars per employee and you don't think he would worry about a "few" hundred million dollars? Also, he isn't spending time in court, his lawyers are.

[0] https://www.google.com/search?q=elon+musk+anti+labour

I would imagine whether he settles or fights it is primarily based on how much it costs and how likely he is to lose. I would point out that even if he settled he would have made money on the purchase - just not as much money.

The anti-labor links seem to be all about being anti union. If the union raised the cost of his employees by $2,000/year, Tesla would have been put over a hundred million in 2019, 150 million in 2020, 200 million in 2021. That's even more money, plus it impacts the value of all his Tesla shares, so it may have cost him even more.

And there's no way he doesn't have to get deposed, and otherwise get annoyed.

I can't see how this can't be seen as deliberate insider trading.

He bought over 13 million shares after March 24 (when he should have made his 5% public) and before he disclosed and the price went up by $10. This saved him $130 Million by buying from people that didn't know he'd made a large purchase.

You can complain about delayed disclosure, but hiding one's fame from the public until a certain point in time isn't insider trading.

He failed to follow strict and straight forward SEC rules on disclosing his purchase and then profited from not doing so. He may be able to get out of a SEC fine with some kind of excuse but it seems very unlikely the people who sold twitter shares in that period don’t have a very good case for compensation.

https://www.sec.gov/Archives/edgar/data/25743/00013871311300...

"Insider trading" refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security.

And the certain point is 5%. Otherwise you are hiding a material condition about the stock, just as if you knew that the dividends were going to be twice what they were expected.

Yes seems like a pretty clear cut case to me as well, but I bet you he'll get off with a minor slap on the wrist.

But this isn't a SEC case (which might fine him a few $100K) it's a joint action civil case which could result in compensatory and large punitive damages if enough people join.

If that. Musk fans love to post memes of him taking on the SEC when the SEC is flat out asleep at the wheel. Not much of a fight if the other side just rolls over most of the time.

Reply on news.ycombinator.com