The Insane $6 *Billion* Dollar Lawsuit against Tesla & Elon Musk

what's at stake for Elon musk's a

lawsuit it is 6 billion dollars of

potential costs for Tesla which would

basically mean they have to borrow lots

of money and given that they just opened

up a credit line for between five to

seven billion dollars which is supposed

to be to help them facilitate the

building of electric vehicle plants and

Battery plants it comes at an

interesting time since while Elon Musk

and Tesla are being sued for Elon musk's

taking Tesla private at 420 tweet from

2018. the potential damages could be as

high as 6 billion dollars for Bloomberg

now investors are claiming that Tesla

stock was artificially inflated by about

66 dollars During the period of time

that uh immediately after Elon Musk

tweeted taking Tesla private at 420 and

then right before

Elon Musk ended up hosting a Blog on the

Tesla website suggesting no we are not

going to end up taking Tesla private now

Bloomberg suggests that there could be a

potential for a settlement that is

substantially lower than a six billion

dollar deal usually a settlement would

be worked out after uh Tesla and Elon

Musk in the event that they end up

losing end up losing uh so a settlement

would be potentially the to the tune of

10 of the alleged damages anywhere

between 500 million dollars to one

billion dollars is the potential damage

that Tesla would face uh in the event of

a settlement after a loss now you might

ask yourself why would anyone settle

after they just won well it's because

Tesla is very likely to appeal uh the

loss and the generally you can only

appeal if your due process has been

somehow violated but Tesla has already

basically set up all they need to be

able to appeal because the judge in the

case who's presiding this case has

already told the jury that he believes

Elon musk's tweets were misleading

now on a pellet Court may end up

determining that the judge in this case

calling Elon musk's tweets misleading

could end up being something that a jury

should determine not an individual judge

that then gives Elon Musk and Tesla a

potential to appeal losing this lawsuit

for a lack of due process however an

appeal could take over a year to be

heard so that would be into early 2024

and an appellate court could end up

ordering an entirely new trial and that

gives Tesla a lot of settlement leverage

because even if the people suing Tesla

and Elon Musk now win if it goes to an

appeal and a new trial happens they

might not win again and Bloomberg

believes uh that this gives massive

settlement leverage to Tesla and Elon

Musk remember these these lawsuits were

all filed in uh in in about mid-2022 for

this issue back in 2018

uh Bloomberg thinks there's about a 50

50 chance that a Tesla and Elon Musk win

or lose

interesting though is the lead plaintiff

this guy Glenn Littleton he's 70 who's

71 years old apparently he was trading

like 10 million dollars worth of Tesla

options in August of of 2018. he had

over 470 unique trade that trades that

month and back in the 80s he was fine

for violating wash sale rules and

briefly had his Securities license

suspended but apparently what's

fascinating in the case is that the lead

plaintiff argues in court today

that hey I thought Elon musk's tweets

were definitive I thought he was

definitely gonna sell Tesla at 420 per

share but emails have actually now come

out uh through the court case and emails

show that he didn't actually think the

uh uh the the case was definitive or

that Elon was definitely going to take

Tesla private at 420 per share Zero

Hedge provided those two emails and

Glenn Littleton here writes I got out of

the obvious stuff because a lot of

people thought it was a hoax and still

had bids out there I saw so many red

flags with Elon and Tesla too much drama

so in other words while he thinks it's

definitive that Tesla is going to be

taken private that's at least what he's

alleging in court in emails at the time

he's saying eh seems like drama seems

like a hoax

and then he says over here there is so

much risk in these options as you can

imagine if this rumor of Elon taking

Tesla private at 420 is correct then the

strike prices except calls below 420

become worthless correct this is

basically if you have out of the money

calls for let's say 500 but the Tesla

the company goes private at 420 then

those calls above 420 uh might either be

worthless or or settle at a lower at a

lower price or probably just honestly

worthless uh and so that's a risk and so

he's alleging that he lost money because

he had to close certain positions forget

about the option stuff for a moment the

point is to say that here's a guy who's

arguing in court I definitely thought it

was going to go private but in emails

he's like it sounds like a rumor and a

hoax on top of that apparently during

the actual coverage period he actually

made 2.4 million dollars on options

so he actually made money he didn't lose

money on his option trades and now In

fairness he did have to close some other

positions uh some of those longer term

call options but by the time his longer

term call options would have expired in

January he would have end up ended up

losing all of his premium on those

because of not only Theta Decay but also

because the call options would have not

actually hit their strikes so we could

put a potentially have lost more money

so a prior judge who's heard this case

has actually said and declared that the

lead plaintiff in the case against Elon

Musk would have potentially lost more

money so if anything Elon must helped

the lead plaintiff a make money and B

Lose less money

so I think it's going to be really hard

for a jury to find that Elon Musk is

somehow liable for this lead plaintiff

losing money when the reality is he

actually made money you're potentially

lost less money than he otherwise would

have but the argument still exists that

well what if Elon was wrong to say that

funding was secured well Elon believes

that funding was secured in fact not

only did he believe that funding was

secured because the private investment

fund of Saudi Arabia Arabia was going to

take Tesla private and had been wanting

to take Tesla private for a while but

according to board meeting minutes

Goldman Sachs and Silver Lake assured

Tesla's board of directors that funding

was available from a variety of sources

all of this is coming out in the lawsuit

another thing that's coming out are

actually text messages uh which we

because they're being submitted as court

evidence here we have to evaluate as

likely being accurate text messages but

who know knows you know people can fake

text messages but this seems like a

reasonable discussion that had was had

and it kind of shows the frustrating

position that Elon Musk was in so

apparently these are texts between Elon

and Yasir who Elon Musk believed was the

representative of Saudi Arabia's private

investment fund that could have made the

decision to help Elon Musk take Tesla

private and so here you see uh an

article that Elon Musk sends to the

individual saying Saudi Arabia's private

investment fund has shown no interest in

helping Tesla's buyout Elon says what

the hell is going on here this is false

Yasir replies this is not true nobody

talked to them okay so it's really clear

that something weird is going on here

because the article is saying Saudi

Investment fund has no interest in

helping the Tesla buy out and now the

individual is saying no that article is

not true which basically says so you are

interested in helping Tesla do their

buyout right uh and then he writes good

morning Elon want to check in with you

and your team to see if you'd be able to

start sending us information we could

have a kickoff team so that we could

talk about the investment basically he's

like hey I gotta sell the idea of taking

Tesla uh uh private to the other people

involved in the private investment fund

elon's like dude I'm deeply offended

this is ridiculous you have to refute

the false statement that you have no

interest in Tesla because we've been

talking about it well apparently they

did that and they made a comment talking

about how they're in talks to invest in

Tesla with a buyout deal and Elon says

dude this is a weak statement it doesn't

reflect the conversation we had at Tesla

you said you were definitely interested

in taking Tesla private and had wanted

to do so since 2016 you also made it

clear that you were the decision maker

that you don't have to sell this idea to

anyone else right now I'm sorry but we

can't work together elon's basically

like middle finger you're a you

suck and the guy's like dude it's up to

you he's like come on man you're

throwing me under the bus here not cool

and then he uh this private investment

fund guy yes here goes look it takes two

to tango we haven't received anything

yet they go back and forth a little bit

I'm not going to read it all word for

word but basically a series like let's

get on the phone and talk about it

elon's like sorry it's over the guys

like do dude come on like I don't want

to throw you under the bus here but we

need some documents Elon replies and

he's like dude it's a publicly traded

company you have everything you need

you've already bought a five percent

stake in Tesla but and then the guy's

like oh but we want details like how do

we take it private and elon's like

you're not an idiot he didn't say those

words but he's like dude when we met

blah blah blah you guys know how to take

a company private I'm just speeding this

up because I'm not gonna read this all

word for word you could pause the screen

and read it yourself but basically

you're extremely experienced financially

and are well aware that a go private

transaction would require a 20 premium

over the market price to buy out any

shareholder that didn't want to sell so

anyway

uh uh we haven't taken any company

private yet in order for us to do that I

got to get some other people involved

blah blah blah we haven't gone to the

media blah blah blah blah and basically

Elon is like dude you suck you told me

you had the power to take the company

private you burned me we have silvergate

and Goldman that could help us take

Tesla private Elon wholeheartedly

believes that the taking Tesla private

tweet is factual that's what he's

arguing in court Bloomberg gives him a

50 50 chance of winning worst case

scenario it's a 50 billion dollar bill

to Tesla although it's likely that's

just going to end up getting settled

down to 500 million to a billion dollars

although given that the lead plaintiff

kind of seems like a trading scumbag who

is just upset he didn't get to make more

money and he's kind of Being Greedy

about this given that he made money and

probably lost less money than he

otherwise would have it seems to me that

it would be very difficult for a jury to

actually say that Elon Musk it deserves

to be guilty and Tesla ultimately

deserves to pay six billion dollars up

to potentially six billion dollars in

Damages I think Tesla and Elon are in

the clear here and the case just

continues to get more and more

ridiculous as more information and data

come out now with that said I'm gonna

hop on over to our course member live

stream I love you all but I also love my

course members and I promise them the

opening bell and some Fundy analysis so

goodbye godspeed hopping over there now

I love you all goodbye