Tesla's New Shareholder Lawsuit Shield: Is Elon Playing Mind Games?

Yeah Baby! Tesla Changes the Rules of the Game

Groovy baby! Austin Powers here reporting live from my shaguar. Word on the street is that Tesla led by the ever so slightly eccentric Elon Musk has decided to shake things up. In a move that’s got more twists than a go go dancer in a phone booth Tesla's changing its corporate bylaws baby! They're making it harder for shareholders to sue. Oh behave! It’s like Dr. Evil trying to shrink the world but this time it’s shareholder rights that are getting the short end of the stick.

Three Percent? That's a Lot of Scratch Baby!

So what’s the dilly yo? Well Austin my boy to sue Tesla now you need to own at least 3% of the company. That's like owning half of London baby! With Tesla's market cap hovering around a trillion dollars that 3% stake is like having a license to print money. In other words you will need more than $30 billion so bring it baby!

Texas Baby! Everything is Bigger Here!

Turns out Tesla has moved its incorporation to Texas a state where the laws are a bit more shall we say 'accommodating' to companies wanting to limit shareholder lawsuits. According to the lovely Ann Lipton this is all perfectly legal. It's like escaping to a desert to avoid the London Fog.

Delaware? Oh Behave!

Remember when Tesla was incorporated in Delaware? Oh behave! A shareholder with just nine shares managed to launch a lawsuit that ended up with a judge slapping down Elon Musk's 2018 compensation package. It's like getting your mojo stolen by a mere mortal.

Tornetta Decision: A Pain in Elon's Austin Powers esque Booty

That whole Tornetta decision where Musk was told to cough up his $56 billion pay package really got his goat. It even made him declare 'Never incorporate your company in the state of Delaware.' Talk about a mood killer baby!

Is This the End of the Road for Shareholder Lawsuits?

So is this the end of shareholders getting a piece of the action? Not necessarily. But it's definitely making it harder. Tesla is appealing the Tornetta decision and the Delaware Supreme Court will have the final say. As for me? I'll be watching with a martini in hand ready to shout 'Yeah baby!'