At a Glance:
- The deal between Twitter might distract Musk from Tesla which will be important for the coming trial in October.
- Since Musk announced he had taken a 9% stake in Twitter, the Tesla stocks slumped to 20%.
- Despite the growth of Tesla, it is being stated that Musk failed to meet a few milestones.
The breaking news of Elon Musk buying Twitter for $44 billion has been the talk of the town for a while. Among the several discussions and debates, one of the surfacing arguments has been regarding Musk’s loyalty towards his home project Tesla. Even a pay package of $56 million could not secure his full-time services for Tesla.
This is false. I’ve had no communication, directly or indirectly, with Trump, who has publicly stated that he will be exclusively on Truth Social.
— Elon Musk (@elonmusk) May 6, 2022
There have been predictions that the deal between Twitter might distract Musk from Tesla which will be important for the coming trial in October. The lawsuit claims that Elon Musk created the 10-year package and Tesla’s board approved it in 2018, without requiring the CEO to devote himself to Tesla.
Greg Varallo from Bernstein Litowitz Berger & Grossmann, a firm that is leading the case against the pay deal commented, “Look at most CEO contracts. The first line, says ‘you’re going to be a full-time CEO and devote substantially full time to the business and affairs of the company.’ That’s standard.”
Elon Musk’s actions affect Tesla stocks
There were no official comments from Musk. However, every step of Elon Musk tends to affect Tesla’s stock and since Musk has announced he had taken a 9% stake in Twitter, the Tesla stocks slumped to 20%. The reason contributing was the concerns if Musk will be dedicating the efforts toward the EV project and other supply chain disruptions.
Elon Musk using collateral for Twitter
The lawsuit alleges that the package was unnecessary as Musk owned 22% of Tesla which gave him plenty of incentive to make the company a success. Now the lawsuit is seeking to cancel the plan that includes the stock options already granted.
Elon Musk will be using Tesla stock as collateral for loans to buy Twitter.
Despite the growth of Tesla, it is being stated that Musk failed to meet a few milestones. The lawsuit will likely turn on the thinking of directors in negotiating the package. The trial will begin on October 24th in Wilmington, Delaware, and is scheduled for five days.
