Megan Blog

By Megan Hartshorn

Megan Blog [1]

          Musk is worth an estimated $153 billion,[2] following the purchase of Twitter for roughly $44 billion in April 2022.[3] Musk’s net worth is largely accredited to his shares in Tesla, Inc., where he acts as Chief Executive Officer, which helped finance this acquisition.[4] But recently, it’s been alleged that Musk knew, or might have known, Tesla’s business was declining when he sold his shares.[5]

          On January 2, 2023, Tesla announced their 4th quarter statistics were below initial targets, which created a large decrease in its stock price.[6] Beginning on October 24, 2022, Tesla cut prices in China due to a decrease in demand from the consumers.[7] Then, beginning December 1, 2022, Tesla began announcing their cutting of prices in the U.S., their lowering of production in China at the Shanghai factory, and their offering of free supercharging for vehicles, up to 10,000 miles, exclusively for vehicles delivered in December.[8] The timing of this stock decrease, which followed the sale of Twitter, and Musk’s sale of his shares worth about $20 billion through multiple transactions in April, August, November, and December of 2022 raises the question: Did Musk know Tesla’s business was going to decline?[9]

          The SEC will need to determine whether the decline in Tesla’s share price showed up in internal figures by December. Further investigation will look to see if Musk could have even seen the figures in order to violate insider trading regulations. This would not be the first time Musk faced investigation and scrutiny for insider trading.[10]

          Generally, insider trading refers to the practice of buying or selling a security based on material non-public information (MNPI). The Securities and Exchange Commission (SEC) regulates and investigates potential cases of insider trading and does not make investigations public until completed or charges are brought. As a corporate insider, Musk would be prohibited from trading their companies’ securities while aware of MNPI.[11]

          It is quite likely that Musk did not know about Tesla’s fortune in 2022, as he lost roughly $200 billion following the drop in Tesla shares.[12] In fact, Musk broke the world record for the “largest loss of personal fortune in history, according to a Guinness World Record report.”[13] It’s been said by some, Musk does not care about his own wealth even after being the world’s wealthiest person.[14] Other billionaires tend to see money as a way to make more money, but Musk uses his money as a means to an end to achieve his “futuristic goals” through his iconic companies.[15] Despite this, the recent decline in Tesla’s stock in December 2022 following Musk’s sale of roughly $20 billion worth of shares, raises some eyebrows that are worth investigating.

About the Author:

            Megan Hartshorn is a current 3rd year regular division law student at Delaware Law School. Following graduation in May 2023, Megan will be working as an Associate at iCapital, a fintech company aimed at powering the alternative investment marketplace, in the Legal and Compliance Department. With hopes of gaining admission to both the Pennsylvania and New York Bars, Megan aspires to work in New York City with a career in Compliance focusing on securities laws. The Journal has changed Megan’s law school experience immensely, and she will be forever grateful to all her fellow staff, A-Board and E-Board members for their leadership, guidance, and friendships.

[1] Mano Kors, KRABI, THAILAND – MARCH 08, 2018: Closeup of Elon Musk Twitter Profile and Picture (photograph), in DreamsTime, (last visited Jan. 30, 2023).

[2] Forbes Profile, Elon Musk, Forbes, (last visited Jan. 20, 2023) (Net worth was estimated as of January 20, 2023).

[3] Derek Saul, Elon Musk Has Now Sold $22.9 Billion In Tesla Shares Since Buying Twitter—And Dragged Down Tesla’s Market Cap by $700 Billion in the Process, Forbes (Dec. 15, 2022 9:15 AM),

[4] Jonathan Weil, Elon Musk Sold Tesla Shares Before Company Acknowledged Weakness, Wall St. J. (Jan. 20, 2023, 11:21 AM),

[5] Id.

[6] Camila Domonoske, Tesla’s Stock Lost Over $700 Billion in Value. Elon Musk’s Twitter Deal Didn’t Help. NPR (Jan. 6, 2023),

[7] Weil, supra note 3.

[8] Id.

[9] Hyunjoo Jin & Chibuike Oguh, Explainer: How Elon Musk Funded the $44 Billion Twitter Deal, Reuters (Oct. 28, 2022 9:25 AM),

[10] Dave Michaels, SEC Probes Trading by Elon Musk and Brother in Wake of Tesla CEO’s Sales, Wall St. J. (Feb. 24, 2022, 6:57 PM),

[11] Weil, supra note 3.

[12] Ians, Elon Musk 1st Person in World to Lose $200 BN in Net Worth: Bloomberg Report, Business Insider India (Jan. 2, 2023, 11:00 AM),

[13] Samantha Lock, Elon Musk Breaks World Record for Largest Loss of Personal Fortune in History, The Guardian (Jan. 11, 2023, 10:05 PM),

[14] Matthew DeBord, The Fixation on Elon Musk’s Billionaire-Ness Overlooks the Fact that He Doesn’t Care About Money, Insider (May 8, 2020 6:25 PM),

[15] Id.