Tesla (TSLA) Chief Executive Elon Musk and the board have been sued by an investor who alleges Musk has put the company at risk with “erratic” tweets.
The risks include billions of dollars in possible liability and market losses, said the suit, which was filed in Delaware Chancery Court on March 9 and made public Friday, Bloomberg reports.
The complaint said the tweets violate 2018-2019 agreements with the Securities and Exchange Commission, requiring company lawyers to pre-approve a wide range of social-media commentary by Musk.
The investor claims Tesla’s board failed to restrain Musk online, according to Bloomberg.
“Musk’s wrongful conduct” and “the failure of Tesla’s board to ensure compliance” have “caused substantial damage” to the company, including legal penalties and “billions of dollars lost in market capitalization,” the lawsuit says, according to Bloomberg.
Tesla’s stock recently traded at $688, down 1.66%. That compares with the 0.97% drop in the Nasdaq Composite index.
Morningstar analyst David Whiston likes Tesla but says it’s way overvalued, putting fair value at $349.
“Tesla has a chance to be the dominant electric vehicle firm long term and is a leading autonomous vehicle player as well as a vertically integrated sustainable energy company with energy generation and storage products, but we see immense competition coming this decade,” he wrote in a commentary last month.
“Tesla's product plans for now do not mean an electric vehicle for every consumer who wants one, because the prices are too high.”