The Tesla CEO faces claims he pocketed $3 billion in ill-gotten gains in late 2022 after learning Q4 vehicle sales would not deliver the 'epic end of year' he promised investors.
  • Elon Musk accused of illegally selling $7.5 billion in Tesla stock in Q4 2022.
  • Lawsuit alleges Musk and board violated fiduciary duties by selling shares ahead of disappointing vehicle sales data.
  • Shareholder seeks disgorgement of $3 billion in illegal gains and damages from directors for reckless behavior.
  • dependencyinjection
    212·
    7 months ago

    I don’t want to defend CEOs here, but there is a code for in the USA, Rule 10b5-1, which sets out a CEOs stock trading plan.

    The reason, if you’re not Elon Musk, is that most CEOs are paid in stock and so it’s inevitable they’re going to sell some. So they set out a plan to say I will sell X shares on X date and the market shouldn’t be spooked.

    What Elon did here is sell 45 million shares, seemingly outside of any plan, which is insane. Usually they wouldn’t be offloading such a volume.

    Selling a small amount of your stock doesn’t indicate you don’t have faith in your own company, but more that you want to convert some of your reward (pay) into actual cash.

    I’m not saying the system is good, just that this is how it works.

    • exanime@lemmy.today
      8·
      7 months ago

      I’m not saying the system is good, just that this is how it works.

      Totally get it… which is why my comment was intended to mean “what the fuck kind of system is this”… not “Elon bad”… although, yes, Elon bad ;-)