Elon Musk's tweet draws Tesla investor lawsuit over share price swing

Elon Musk's tweet draws Tesla investor lawsuit over share price swing

Elon Musk's tweet draws Tesla investor lawsuit over share price swing

Tesla Inc (TSLA.O) and Chief Executive Elon Musk were sued twice on Friday by investors who said they fraudulently engineered a scheme to squeeze short-sellers, including through Musk's proposal to take the electric auto company private.

Kalman Isaacs, one of the investors who filed suit Friday in a San Francisco court, claimed Musk's tweets were "designed to completely decimate short-sellers". This was the message given by Musk in his tweet, some three days earlier and what's more, he said the funds required to go through with that exercise, $72 billion, have also been tied up.

The shares climbed again late Thursday on a report that the board planned to meet with financial advisers to formalize a process for going private and would ask Musk to recuse himself from these discussions. In their lawsuits, they have said that through his tweets, Musk has helped in inflating the share price artificially.

It said this occurred largely through a series of tweets by Musk on August 7, including when he said he might take Tesla private and that there was "funding secured".

Such investors have always been an irritant for Musk, who has sometimes used Twitter to criticize them.

The US Securities and Exchange Commission is understood to have already opened an inquiry into Mr Musk's tweets.

Short-sellers of Tesla's stock have faced increasing aggression from Musk over recent months, with the billionaire citing the lack of market support as one of the main reasons he wants to take the company private.

The complaint said the class period begins on the afternoon of August 7, when the defendants launched their "nuclear attack" on short-sellers, and ends the next day.

Musk also said, with characteristic Kanye West arrogance, that the Tesla stock is "the most shorted stock in the history of the stock market" and that, as it is publicly traded, "there are large numbers of people who have the incentive to attack the company".

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