By Logan Coe, 3/31/2021
Volkswagen, a car company created in 1937, announced recently that they were going to change their name for the first time in almost one hundred years, claiming that the company would now be called ‘Voltswagen’. Soon afterwards, the company announced that this was actually just an April Fools Day joke, and the company is not planning on actually changing their name or pursuing electric cars as of now.
This joke, while it might seem harmless, actually could be considered illegal, and it might result in a lawsuit. This action is called misleading the investors, and it is a common and serious crime for businesses to commit, and it is especially bad for big businesses like Volkswagen due to it hurting their reputation as well.
When Elon Musk, the CEO of Tesla Motors, tweeted about making his company private and that they were going to start securing funding at $420 a share in 2018 (which he only posted to make a joke about weed), he ended up having to pay 20 million dollars to the Securities and Exchange Commission due to him misleading the shareholders. This is a prime example that shows that when a business or member of a company makes a joke involving their company that could be taken seriously, they could be met with lawsuits, fines, and mistrust.
Misleading the shareholders and investors is a serious crime, and in Tesla’s case, they had to pay the price for it. When the Volkswagen marketing team joked that they were going to change their company name to Voltswagen, which is meant to mean that the company was going to start producing electric cars, their stocks actually rose by 10%. This rise was because a lot of people bought stocks in this company due to what they would expect to be a boom in their business since the company was now going to start producing electric cars. Since the company was not actually planning on doing this, the people that had invested felt cheated and that they were mislead by the company.
After it was announced that this was actually a joke, the company’s stock dropped to around what it was before this event, meaning most of the people that bought into the company due to this had since sold their stocks. This joke from the Volkswagen could prompt investigation from the Securities and Exchange Commission or the litigation from the investors who bought into the company due to this joke.
Overall, this instance shows that misleading the investors and the shareholders of a company is a crime, and could easily cost a company a fortune, and it shows that companies should not risk making silly jokes because it could end up backfiring big time.