Tesla CEO Elon Musk has made good on his promise to take legal action against progressive media-monitoring nonprofit Media Matters. Musk believes that the organization’s actions have negatively impacted his social-media platform, X.
The 15-page complaint outlines X’s belief that Media Matters manipulated their research to manipulate public perception and influence advertiser decisions. X alleges that Media Matters’ study, published on November 16, led major advertisers such as IBM, Comcast’s NBCUniversal, and Apple to halt all advertising on the platform.
Media Matters has not yet responded to the lawsuit.
Media Matters President Angelo Carusone issued a statement addressing Musk’s threat of a lawsuit, stating, “Far from being a champion of free speech, Musk is resorting to bullying tactics and baseless lawsuits in an attempt to suppress accurate reporting. Musk himself confirmed that the ads in question did run alongside the pro-Nazi content we identified. If he does decide to sue us, we are confident in our ability to prevail.”
The lawsuit comes after Musk endorsed a claim on November 15 that Jewish communities were spreading hate against white people. This drew criticism from organizations such as the Anti-Defamation League and the White House.
In response to the backlash, Musk tweeted, “This past week, there were hundreds of false media stories claiming that I am anti-Semitic. Nothing could be further from the truth. I only wish the best for humanity and a bright and prosperous future for all.” On Saturday, he announced his intention to file a lawsuit, which he followed through on Monday.
Elon Musk Faces Lawsuit Amidst Controversy
Renowned legal expert, Carl Tobias, from the University of Richmond, has expressed his belief that the lawsuit against Elon Musk holds merit. Despite this, the lawsuit is unlikely to be dismissed immediately. If allowed to proceed, the case will involve depositions, discovery, and a potential trial, with Tobias speculating that it may even be heard before a judge rather than a jury. The legal process is estimated to take up to six months, during which time the judge’s affiliation with President Trump may come into play regarding the case’s jurisdiction.
Media Matters Investigation
In addition to the lawsuit, Texas Attorney General Ken Paxton has announced an investigation into Media Matters due to its involvement in the controversy surrounding X. Unfortunately, Media Matters did not respond promptly to a request for comment regarding the investigation. This development further compounds the challenges faced by Musk and his company.
Tesla Investors Concerned
Investors in Tesla (TSLA) have been closely monitoring the X situation, apprehensive about the potential negative impact on Tesla’s brand. Furthermore, losses incurred by X might have consequences for Tesla investors in terms of Elon Musk’s financial stability.
The Financial Impact
Musk’s holdings of Tesla stock serve as a significant source of both cash and liquidity. To finance his acquisition of a social media platform, he sold billions of dollars’ worth of Tesla shares throughout 2022. However, this move had detrimental effects on Tesla’s stock value, as shares experienced a decrease of over 60% from April 14 to December of that year. Although the general stock market experienced a decline during this period, Musk’s substantial stock sales placed additional pressure on prices. Consequently, prospective investors were deterred from increasing their positions.
Current Stock Performance
Since Musk’s tweet on November 15, Tesla stock has only witnessed a minimal decline of approximately $1, which amounts to less than 1%. In comparison, the Nasdaq Composite has maintained a marginal increase over the same period.