Tesla's Elon Musk facing lawsuits from 'short-sellers'

Randal Sanchez
August 14, 2018

August 7, 2018 - Musk surprises investors by using Twitter to announce he is considering taking Tesla private at $420 per share, adding "Funding secured".

Musk and Tesla have yet to comment on the lawsuit, which was filed as a securities-fraud class action in federal court in San Francisco on Friday.

On Friday, two lawsuits were filed accusing Musk of seeking to harm short sellers by artificially running up the price of the company's shares through his Tuesday tweets.

Short-sellers borrow shares they believe are overpriced, sell them, and then repurchase shares later at what they hope will be a lower price to make a profit.

June 21, 2016 - Tesla announces its plan to buy Solar City, a solar energy system company in which Musk holds a stake, for $2.9 billion.

Tesla and the Securities and Exchange Commision declined comment on Thursday. Musk is Tesla's largest shareholder, with a 20% stake in the company. If it's accurate, the report highlights that Musk's initial description of the plan which mentioned that the funding had been secured wasn't exactly true.

"The most striking feature of the quarter is that Elon Musk appears erratic and desperate", Einhorn's letter added.

Fortnite for Android not officially available on Play Store: Google
If you're running Android 9 Pie on a compatible phone, you can download Digital Wellbeing now from the Google Play Store . Because there are no Android servers yet, this is the only way for Android players to get into a live game now .

When Elon Musk took to Twitter earlier this week and said he was considering taking the company private again, and that he had "secured" funding, that sounded pretty ironclad.

Short sellers are investors who bet against a company and look for its stock price to go down.

Even a "preliminary commitment" with an investor or bank would be enough to support the idea that Musk's statements were made in "good faith", Fisch said.

Buying out shareholders at the price Musk quoted - nearly 25% above where the stock was trading at the time of his initial tweet - would make the deal worth $82 billion.

Musk has a history of setting aggressive sales targets that critics have called unrealistic.

Wall Street analysts have expressed doubts about the billionaire' s ability to gather enough financial backing to complete a going-private deal.

The cases are Isaacs v Musk et al, U.S. District Court, Northern District of California, No. 18-04865; and Chamberlain v Tesla Inc et al in the same court, No. 18-04876.

Other reports by

Discuss This Article

FOLLOW OUR NEWSPAPER