Tesla has implemented a new bylaw requiring investors to hold at least a 3% ownership stake before they can file derivative claims against the company. This change makes it nearly impossible for small investors to sue Tesla's executives or board members.
The new rule effectively blocks most retail shareholders from challenging the company's board in court, as a 3% stake would equate to approximately $34 billion in shares. This move consolidates power within the existing leadership structure.
Critics argue that such a high threshold limits shareholder oversight and accountability, potentially raising concerns about corporate governance standards. The change could reduce legal risks for the company but at the expense of minority shareholder rights.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.