Behind Elon Musk’s Twitter Poll Is a Tax Bill Coming Due

Nonetheless, James Cox, a professor at Duke University law school and an expert in securities laws, said it might be hard for Mr. Musk to go back on his Twitter pledge.

“It’s a no-win situation,” Mr. Cox said. “In the securities law, the problem is this could be seen as a misrepresentation that was meant to mislead if another shareholder sold on Musk’s tweet.”

But Mr. Cox said it would be a hard lawsuit to win, because chief executives are allowed to make statements and change their minds, as long as they meant what they said when they said it.

It would not be the first time Mr. Musk had gotten into trouble over his tweets. In late 2018, he and Tesla settled a lawsuit by the Securities and Exchange Commission, without admitting guilt, for tweeting about a potential sale of Tesla that never happened. Mr. Musk was also sued for defamation in 2018 after calling a diver who had helped rescue children stuck in a cave in Thailand a “pedo guy” on Twitter. Mr. Musk won the suit.

Daniel Ives, a stock analyst at Wedbush Securities who follows Tesla, called Mr. Musk’s latest Twitter pledge “bizarre,” but said he thought that the stock, which is up more than 60 percent this year, would keep climbing even with Mr. Musk cashing out a portion of his holdings, given Tesla’s prospects and the investor enthusiasm for the company.

“Musk was likely to sell some of his Tesla stock before year end, but no one ever imagined there would be a Twitter poll translating into a 10 percent sale of his ownership,” Mr. Ives said. “This weekend’s Twitter poll was a strange one even for Elon.”

Article source: https://www.nytimes.com/2021/11/08/business/elon-musk-twitter-poll.html