Tesla chief Elon Musk was accused of selling more than $7.5 billion worth of Tesla stock in late 2022 as part of an insider trading move, according to a lawsuit filed by a Tesla shareholder Thursday, who accused Musk of exploiting his position and breaching fiduciary duties.
The lawsuit was filed in Delaware on Thursday. (Photo by Apu Gomes/Getty Images)
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Key Takeaways
- The lawsuit, filed by Tesla investor Michael Perry, alleges Musk had nonpublic information about Tesla falling short on fourth-quarter deliveries and production when he sold approximately $7,530,113,926 of company stock in November and December 2022.
- Had Musk waited to make the selloff after the public announcement of the delivery miss, the sales would have netted him less than 55% of what he actually realized, the lawsuit said.
- Musk allegedly profited about $3 billion from the November and December sales, according to the lawsuit, which cited Tesla’s Jan. 3, 2023, closing price of $108.10 per share.
- Bloomberg, which first reported the lawsuit, noted Perry has asked a judge for Musk to return the profit he made from the alleged insider trading.
- Tesla and Musk’s lawyer did not immediately respond to Forbes’ request for comment.
Forbes Valuation
We estimate Musk’s net worth at $209 billion, making him the wealthiest person in the world. The Tesla chief reclaimed the No. 1 spot from LVMH head Bernard Arnault this week after announcing his artificial intelligence startup xAI raised $6 billion in a series B funding round.
Key Background
Musk sold 19.5 million Tesla shares worth about $3.95 billion in November 2022 not long after closing his $44 billion purchase for Twitter. He followed up with another large selloff in December, selling around $3.6 billion worth of his company’s stock. The tech billionaire, who said earlier that year he had “No further TSLA sales planned after today,” sold a total of about $22.9 billion worth of shares in 2022 after agreeing to buy Twitter, according to CNBC, which cited financial research firm VerityData. Perry’s suit is the latest dig into Musk’s stock activity.
A federal investigation into his purchase of Twitter is in full swing, with Musk agreeing this week to testify in the Securities and Exchange Commission’s probe into the $44 billion acquisition. Musk was sued by regulators last year for allegedly refusing to testify about the purchase.
