Why are Tesla shareholders suing Alon Musk?

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Pension funds and asset managers at Tesla


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Filed a lawsuit against the richest man in the world, and CEO Alon Musk. According to the lawsuit, Mas pressured the company’s board to authorize him to close the Solar City deal somewhere in 2016, a deal in which Musk was the company’s senior shareholder.

The lawsuit was filed demanding an astronomical sum of about $ 13 billion, which shareholders say was stolen from them when they bought Solar City. Musk, on the other hand, replied that the deal was part of a ten-year master plan to create an integrated company that would change world production and energy consumption by integrating Solar City’s solar roof panels with Tesla’s electric cars.

Tesla acquired Solar City as the electric vehicle maker approached the launch of its Model 3 model, its base car for the mass market that was critical to its strategy. Shareholders claim that the deal to buy Solar City was an unnecessary distraction and burdened Tesla with Solar City’s financial troubles and debts and hurt their income from the company’s shares.

Shareholders claim that although he owned only 22% of Tesla, Musk had control of Stella due to the ties he had with the board members and the domineering style with which he operated. To the extent that the plaintiffs succeed in proving this, the likelihood that the court will conclude that the transaction was unfair to the shareholders is indeed possible.

Musk repeatedly defended the Solar City deal and said the company needed to be acquired quickly or find financing to solve its cash shortage.

In the shadow of the lawsuit, Tesla shares opened up trading, moving down. This is probably due to the increase in the company’s share price target published today by the investment bank Credit Suisse, which raised its price target on the Tesla share to $ 1,025.


This is an increase of 23.5% from the previous target price of the bank, which also expects Tesla to announce a better-than-expected profit margin in its fourth-quarter earnings report next week.

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