Because it is a shareholder lawsuit, supposedly claiming some damages to the Tesla shareholder, who happens to be doing very well. The non-shareholder community is the one at loss and would want restitution for their "damages," but Tesla, Inc. really has no responsibility towards them beyond the general rules and regulations, i.e. SEC et al complaints. TL;DR: if you bought or held TSLA due to that tweet, well, it's already above that price+market gain.

Genuinely asking, I don't understand the distinction you're making. Weren't these folks shareholders?

Is the idea that if you're no longer a shareholder, this makes you bad?

It doesn't make them bad. It makes them disingenuous. This Tweet did not do any damage to people who has held onto Tesla stock. It did damage to short term arbitrage seekers that were trying to make a profit by being the first to act on the news. These people were at one point shareholders, but they likely weren't shareholders before the Tweet and likely aren't shareholders now. I don't and I assume the general public doesn't have a lot of sympathy for that type of trader.

The definition of shareholder doesn’t require that somebody hold the shares for a given amount of time. It’s clear that you don’t have sympathy for people who aren’t long on Tesla stock, but that doesn’t change the fact that they were shareholders, and they were misled because Musk made false statements about the finances of his company to the public.

> It did damage to short term arbitrage seekers that were trying to make a profit by being the first to act on the news.

As opposed to long term traders, who are not trying to make a profit?

As opposed to long term traders who are suing without having been harmed.

Ideally, in a lawsuit, you want the plaintiff to have suffered some kind of harm at the hands of the defendant.

Are short term traders not shareholders at a moment in time? Why are you segmenting shareholders based on length of ownership?

Filing a lawsuit does not mean you will win.

Yes, you can tactically become a shareholder and file suits as some people do all the time. You miss earning you get hit by a shareholder lawsuit every time. This is not a rare thing, but also does not necessarily imply they have any reasonable claim to any damages. Could be just leeching.

The distinction between this and the SEC matter that was settled is that SEC is supposed to care about the integrity of the market at large, not just Tesla, Inc. shareholders doing well at the cost of other players in the market that were misled. That's a much stronger basis to argue for damages.

Maybe I'm being unclear. I'm wondering why we shouldn't care about damages to day traders. Is the suggestion that those types of investors are doing something bad? I don't know anything about investing, but wouldn't they just be people who do quick trades?

"We" should, and "we" do, through SEC and other regulators or criminal investigation against the executives. That matter, however, is already settled, for better or worse. The suit at hand is on the basis of Tesla, Inc.'s fiduciary duties to its shareholders and it is hard to imagine Tesla did not do well by its shareholders at least taking a ~one-year lens.

> Tesla, Inc.'s fiduciary duties to its shareholders and it is hard to imagine Tesla did not do well by its shareholders at least taking a ~one-year lens.

Tesla's stock went down below 200 in May of 2019, well after the tweet and skyrocketed after that. The long term performance of Tesla stock is not the result of that tweet in August of 2018 and that tweet was not representative of creation of long term value. If Musk hadn't tweeted that day, I would bet long-term performance for Tesla shareholders would have been identical.

If Musk actually had funding secured and did take the company private, recent share prices might even indicate that would have been against the long term interests of Tesla shareholders as they were betting on the long-term results of Tesla's investments in manufacturing and would have been deprived of the gains from that bet that they are seeing now.

Shareholder litigation isn't regulatory issue, it is totally separate, has different statutes of limitations and has no bearing on what Elon settled with the feds.

People who don't have stock in Tesla and profit when the stock price goes down think that Musk doing things that make the stock price go up is bad. People who have stock in Tesla and profit when the stock price goes up aren't going to be particularly mad when Musk makes the stock price go up, and they're the only ones who get to participate.

Holding a short position is similar to having a friend with a spare old car. Their lazy kid is going to get a job and their license eventually, and they definitely want to have the car for that, but who knows when that will be. You buy it for $3,000, promising they can have the car back whenever they want. But you sell it immediately to a third party. You're planning to buy them a replacement car on the used market when the car depreciates (they'll never know the difference), hopefully next year that old gas guzzler engine is even less popular and that model year's styling is considered even more dated. When your friend asks for the car back, you'll buy one for $2,000 and make a tidy profit! What happened to these folks was that the car didn't depreciate from $3,000 to $2,000 like they expected it to, that model had the lead role in a blockbuster movie and overnight, it became a coveted classic car. Turns out there are only a couple hundred still on the road, and now, if your friend asks for it back, you'll have to go to a big auction and pay $50,000 to replace it, suffering a loss 4700% greater than the profit you expected to make.

This is a lawsuit for car owNers, not car owe-ers. The owners are $47,000 richer, they don't want to sue the car manufacturer, regardless of any underhanded dealings that got it that movie role.

If you were a shareholder who sold because you saw the SEC seeking enforcement action, your actions were directly impacted by Elon's speech, and you can argue you have losses.

I am sure there will be some arguments along that line or similar, so we will see, but the situation would be entirely different had the stock been at say, $220 today.

The stock price today is immaterial, as it relies on information that no investor had at that point in time. Hindsight is always 20/20.

It is a civil lawsuit and it sure is material as far as quantifying damages is concerned. But why speculate when we can just wait and see the outcome.

Again, I agree that your post above might serve as an avenue to claim some damages that a judge would agree to, but to say stock price today is immaterial is just plain wrong. If the stock price had dropped to $100 today, it would have been likely that all shareholders could make a valid argument to a claim, but now at the very least one has to demonstrate that they were a shareholder at the time of the tweet, and they have taken a certain action that hurt them based on that tweet.

Elon Musk encourages his supporters to view him as a wrongly persecuted underdog, victim of numerous nefarious conspiracies from established industries. Claiming that his critics are seething short sellers is part of this.