A shareholder lawsuit filed against Tesla Motors, Inc. ( TSLA ) has progressed to the arguments phase, according to Seeking Alpha . The case will be heard in a Delaware court .
The judge is expected to rule on a demand from the plaintiff, Shahid Haque, for internal company records related to customer demand and Tesla production issues. The company’s lawyers, however, have argued that all relevant documents have already been provided. (See also: Four Lawsuits Filed Against Tesla SolarCity Merger )
Haque filed the lawsuit last year alleging the electric car maker has made numerous, repeated excuses for missing sales expectations. He’s complained about the fact that Tesla has missed its own sales projections for electric vehicles since 2014. In June 2015, Haque attempted to take a look at Tesla’s financial books and records under Section 220 of Delaware General Corporation Law.
Saying he lacked a proper purpose for seeking the company’s books and records, Tesla has declined Haque’s request. The company says that he has failed to establish a credible basis for any suspected wrongdoing. Haque then asked the court to force Tesla to produce the documents and allow him to make copies. (See also: The Story Behind Tesla’s Success )
“Shareholders of Tesla invest in the company based on the promise that the company will one day become the dominant manufacturer of electric vehicles in the world,” Haque’s complaint states. “Based on this promise, Tesla has developed an almost cult-like following among investors and car buyers alike.”
Investors and analysts aren’t concerned about the lawsuit, which has shown to have had little, if any, impact on Tesla’s stock price. The only issue to consider, if Haque wins the case, is that some internal sales projections and production information could become public.
Tesla shares have declined 19.52% year to date, trailing the 9.66% rise in the S&P 500 ( SPX ) index.
Source: www.investopedia.com
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