The Future for Tesla Stock Following the Insider Trading Scandal

At the end of January, Tesla released its Q4 earnings report for 2021, and it seemed like everything was going well.  

However, things now appear to have taken a turn for the worst; The end of February brought in news that the SEC had accused Musk of insider trading. 

When it comes to this case, the finer details of who is at fault might be complex, but the bare bones of what happened are simple enough to explain in a few words. 

Elon Musk’s brother Kimbal Musk sold $108 million worth of Tesla shares one day before Elon Musk tweeted a poll asking the world if he should sell his own 10% stake. 

As anyone could have predicted based on the track record of Musk’s tweets, the poll sent stockholders into panic, resulting in a dip in the Tesla stock price.

Insider trading laws are in place to ensure that individuals who have “insider knowledge” of what could happen to the market — such as employees or shareholders — don’t use that to earn profits. 

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