Why Musk's Twitter offer rattled Tesla investors

Some shareholders say Mr. Musk’s off-the-cuff Twitter posts — he’s already drawn comparisons between Justin Trudeau, Canada’s prime minis...

Some shareholders say Mr. Musk’s off-the-cuff Twitter posts — he’s already drawn comparisons between Justin Trudeau, Canada’s prime minister, and Hitler — have already damaged Tesla.

“The guy said so many controversial things,” said Kristin Hull, founder and chief executive of Nia Impact Capital, a fund in Oakland, Calif., that invests in positive social impact businesses. “Are they distractions? Are they confusing? Did he interfere with stock value through his tweets? Absolutely.”

With Mr. Musk becoming the owner of Twitter, “it’s only getting bigger,” said Dr. Hull, who was an educator before turning to social purpose investing. Nia recently sold most of her shares in Tesla, she said, because the fund was unhappy with the company’s response to accusations of racism at its plant in Fremont, California.

Mr. Musk’s ownership of Twitter could alienate some potential Tesla buyers. Among those considering buying an electric car, Democrats outnumber Republicans almost twice, according to Morning Consult, a research company. But Democrats are also the group most likely to be put off if Mr. Musk, in the name of free speech, opens up Twitter to extremist views or misinformation.

The acquisition of Twitter could intensify the scrutiny of Mr. Musk by stock market regulators. He was sued by a Twitter shareholder who accuses him of missing the regulatory deadline to report that he had amassed a 5% stake in the platform.

The lawsuit, filed by Block & Leviton, a Boston law firm, claims Mr Musk saved himself tens of millions of dollars by waiting six days past the deadline to disclose his involvement. He was able to continue to buy Twitter shares more cheaply than would have been possible if his interest was public knowledge, according to the suit.

Mr. Musk has a long history of antagonism with the Securities and Exchange Commission. Last month he failed to convince a New York judge to release him from a 2018 agreement with the SEC that requires him to have a company lawyer screen his social media posts if the statements could alter Tesla’s stock price.

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Newsrust - US Top News: Why Musk's Twitter offer rattled Tesla investors
Why Musk's Twitter offer rattled Tesla investors
Newsrust - US Top News
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