Tesla (TSLA) and its CEO, Elon Musk, secured a major legal victory. A federal judge in Manhattan dismissed a lawsuit accusing the billionaire of manipulating the cryptocurrency Dogecoin (DOGE-USD). The judge ruled that the plaintiffs failed to provide sufficient evidence to support their claims.
The lawsuit was filed in June 2023 by a group of Dogecoin investors. They alleged that Musk’s social media posts and TSLA’s acceptance of the cryptocurrency as payment had artificially inflated Dogecoin’s price by over 36,000%.
The plaintiffs sought $258 billion in damages, claiming that Musk’s actions led to insider trading and market manipulation.
Here’s Why the Judge Rejects Claims
The judge rejected these claims, finding no evidence of fraudulent or manipulative behavior by Musk or Tesla. The court found that Musk’s public comments about Dogecoin were meant to be humorous, rather than to deceive investors.
Moreover, the lawsuit was dismissed with prejudice, which means that the case was permanently closed and cannot be refiled or brought back to court. This outcome is a significant win for Musk and Tesla, allowing them to move past this legal matter.
Although the company continues to face other legal and regulatory risks, especially concerning its advanced driver assistance systems like Autopilot, this win provides some relief. It should be noted that Tesla’s legal and regulatory risks account for 17.5% of its total risks. This is slightly below the sector average of 18%, indicating that the company is effectively managing these risks.
Is Tesla a Buy, Sell, or Hold?
Intense competition in the EV market and the company’s legal troubles keep Wall Street analysts sidelined on TSLA. It has 10 Buys, 14 Holds, and seven Sell recommendations for a Hold consensus rating. The analysts’ average price target on Tesla stock of $211.46 implies 2.51% upside potential. Shares of the company have gained 15.38% in the past three months.
