On August 28, 2025, Elon Musk, the CEO of Tesla and owner of X (formerly Twitter), filed a motion to dismiss the lawsuit brought against him by the U.S. Securities and Exchange Commission (SEC). The lawsuit accuses Musk of failing to disclose his multibillion-dollar stake in Twitter on time back in 2022, allegedly giving him a financial advantage and creating legal ripples in the market.
Details of the SEC Allegation
The SEC claims that Musk was 11 days late in disclosing his 9.2% stake in Twitter, which allowed him to acquire an additional $500 million in shares at lower prices before his stake became public. If the court does not dismiss the lawsuit, Musk could face significant financial penalties and may be required to return the profits he gained due to this delay.
Impact on Tesla’s Stock Performance
Following the news, Tesla’s (NASDAQ: TSLA) stock experienced a minor decline, dropping 1.04% to $342.65 in pre-market trading on August 29 and an additional 0.96% thereafter. Reports of a 40% drop in European sales and stiff competition from Chinese automaker BYD (HKEX: 1211) have compounded Tesla’s struggles in the global market.
Despite these challenges, Tesla remains a top player in the electric vehicle (EV) market, and many investors are keeping a close eye on these developments. If you’re considering investing in Tesla or any EV stock, ensuring a diversified portfolio might help mitigate potential risks in such a volatile market.
A History of Controversies
Musk is no stranger to legal battles with the SEC. In 2018, he clashed with the regulator over tweets suggesting plans to take Tesla private, a move that famously landed him under scrutiny. His legal team now argues that the current lawsuit is politically motivated, citing his criticisms of the government.
What’s Next for Musk and Tesla?
The outcome of this legal battle remains uncertain, but its implications could extend beyond Musk’s personal finances. Investors, analysts, and market watchers should keep a close eye on key updates regarding this case and its potential impact on Tesla’s performance.
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