Tesla founder Elon Musk’s infamous “funding secured” tweet back in 2018 will see he and his company pay back more than 3,000 investors roughly $12,397 each.
According to a Securities and Exchange filing on Wednesday, the lawsuit, which accused Musk of defrauding investors over a tweet in which he claimed he was ready to take the EV maker TSLA,
Those investors were set to recoup 51.7% of their calculated recognized loss. The SEC has asked the judge to give the plan final approval.
Only shareholders who submitted a completed claim form by Sept. 2022 to an administrator, Rust Consulting, will get the payment.
In total, Rust sent out 98,221 notices to potential claimants, receiving and processing 6,396 claims forms in the end, with 3,715 ultimately recommended to get a share of the payout. A further 365 claimants were eliminated because they failed to meet the minimum distribution amount of the plan of $10.
Musk and his company agreed to civil penalties of $40 million plus interest, and a so-called “Fair Fund” was set up in an interest-bearing account at the U.S. Treasury’s Bureau of Fiscal Services. The SEC, which went after Musk in 2018 over the Aug. 7 tweet of that year, has estimated losses to investors of $80 million, according to Fortune and Bloomberg.
“Musk’s false and misleading public statements and omissions caused significant
confusion and disruption in the market for Tesla’s stock and resulting harm to investors,” the SEC said in its 2018 complaint.
Some estimated even bigger damages to shareholders. Forensic Economics’ Michael Hartzmark , a witness testifying at a separate class action trial over Musk’s liability earlier this year, claimed that Tesla investors had lost $12 billion over 10 days due to the “funding secured” tweet.
According to Fortune, the judge said he would sign off on the payout plan Sept. 1, provided neither Tesla nor Musk present any objections.
Since Musk’s infamous tweet, Tesla shares have soared 886%. Sitting at the top of Bloomberg’s Billionaires Index, Musk was worth $215 billion as of Friday.