In a courtroom drama, a Delaware Court of Chancery judge dealt a hefty blow to Elon Musk, canceling Tesla’s record-breaking $56 billion pay package, calling the compensation granted by the EV maker’s board “an unfathomable sum” that was unfair to shareholders.
This news raised worries in the crypto world, with many thinking Musk might sell his large Bitcoin holdings, currently at 9,720 BTC.
Musk Loses $56 Billion
On January 30, 2024, Chancellor Kathaleen St. J. McCormick canceled the $56 billion compensation awarded to Elon Musk by Tesla in 2018.
The recent decision by Chancellor Kathaleen St. Jude McCormick concludes a legal dispute that lasted over five years. The disagreement began with a lawsuit from Tesla shareholders against Elon Musk and the company’s directors. The lawsuit alleged that Musk and the directors breached their duties to Tesla, using company resources for Musk’s gain.
The lawyers for the shareholders said the big payment to Musk should be canceled. They argued that Musk had too much influence over the negotiations, describing them as deceptive and incomplete and that the shareholders didn’t get enough good information in the papers they got before making decisions.
In a prior case in 2022, the same judge oversaw a matter involving Twitter Inc., now X, where Musk was compelled to proceed with an acquisition. Despite this history, Twitter has not shown outstanding performance.
Musk’s Response to the Court Ruling
Musk responded to the court ruling on X, his social media platform, with business advice, “Never incorporate your company in the state of Delaware.” He recommended incorporating in Nevada or Texas for shareholder-centric decision-making.
His immediate tweets suggested a mix of acknowledgment and nervous anticipation regarding the court’s decision.
Crypto Sell-Off On The Verge
Investors are wary of the repercussions of this court ruling on the cryptocurrency market, speculating that Tesla, under Musk’s direction, may contemplate selling its considerable Bitcoin holdings.
Tesla’s recently disclosed Q4, 2023 financial report revealed a total revenue of $25.2 billion with an operating profit of $2.1 billion. During the quarter, Tesla maintained its Bitcoin position, holding 9,720 BTC for six consecutive quarters.
As of now, Bitcoin faces resistance at $46,000, hovering at $43,014 with a 0.8% decrease in the last 24 hours. Notably, it experienced an 8.32% increase over the week, intensifying the focus on Musk’s next moves and the potential shifts in the crypto landscape.
