Tesla’s Stock Plummets 40% as NYC Pension Funds Report $300 Million Losses

New York City Comptroller Brad Lander has formally requested that the city, a significant shareholder in Tesla, initiate legal action against the electric car manufacturer and its high-profile CEO, Elon Musk.

This unprecedented move stems from alleged breaches of fiduciary duties, which Lander argues have materially harmed shareholders, particularly the city’s pension systems, which hold approximately three million shares of Tesla stock.

In less than three months, Tesla’s stock has plummeted nearly 40%, leading to over $300 million in losses for New York City’s pension funds.

New York City Comptroller calls for legal action against Elon Musk over Tesla’s stock plunge

Lander claims that Musk’s distractions—most notably his involvement with the cryptocurrency Dogecoin and his relationship with former President Donald Trump—have diverted attention away from Tesla, jeopardizing the company’s financial health and shareholder value. “Ever since Elon Musk took over DOGE and became best-friend-in-chief with President Trump, Tesla has suffered financially,” Lander stated.

Further exacerbating the situation, Musk has been criticized for lacking a dedicated CEO since 2017, which Lander argues reflects poorly on Tesla’s governance. The Comptroller emphasized concerns over the Tesla board’s inability to provide adequate oversight while Musk appears to neglect his responsibilities to the company in favor of other ventures, including his recent creation of xAI.

This legal push echoes worries raised by Tesla shareholders last summer, who accused Musk of breaching his fiduciary duties through various actions, including poaching Tesla employees and diverting resources away from the company. The current lawsuit would be filed under SEC Rule 10b-5, targeting alleged material misstatements regarding Musk’s role within Tesla.

“If there’s still justice in the US, I think it’s inevitable that Musk will be found in breach of his fiduciary duty to Tesla shareholders”, Lander asserted. The outcome of this legal action could set a significant precedent for corporate governance and CEO accountability moving forward.