Quantcast
Connect with us

Elon Musk sued over tweets, going private proposal

Published

on

Tesla Inc 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 car company private.

The lawsuits were filed three days after Musk stunned investors by announcing on Twitter that he might take Tesla private in a record $72 billion transaction that valued the company at $420 per share, and that “funding” had been “secured.”

ADVERTISEMENT

In one of the lawsuits, the plaintiff Kalman Isaacs said Musk’s tweets were false and misleading, and together with Tesla’s failure to correct them amounted to a “nuclear attack” designed to “completely decimate” short-sellers.

The lawsuits filed by Isaacs and William Chamberlain said Musk’s and Tesla’s conduct artificially inflated Tesla’s stock price and violated federal securities laws.

Tesla did not respond to a request for comment on the proposed class-action complaints filed in the federal court in San Francisco. The company is based in nearby Palo Alto, California.

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.

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

ADVERTISEMENT

Musk’s Aug. 7 tweets helped push Tesla’s stock price more than 13 percent above the prior day’s close.

The stock has since given back more than two-thirds of that gain, in part following reports that the U.S. Securities and Exchange Commission had begun inquiring about Musk’s activity.

Musk has not offered evidence that he has lined up the necessary funding to take Tesla private, and the complaints did not offer proof to the contrary.

ADVERTISEMENT

But Isaacs said Tesla’s and Musk’s conduct caused the volatility that cost short-sellers hundreds of millions of dollars from having to cover their short positions, and caused all Tesla securities purchasers to pay inflated prices.

Tesla’s market value exceeds $60 billion, and its shares closed Friday up $3.04 at $355.49.

ADVERTISEMENT

According to his complaint, Isaacs bought 3,000 Tesla shares on Aug. 8 to cover his short position.

The proposed class period in Isaacs’ lawsuit runs from the afternoon of Aug. 7 through the next day, and in Chamberlain’s lawsuit runs from Aug. 7 to Aug. 10.

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.

ADVERTISEMENT

Reporting by Jonathan Stempel in New York; Additional reporting by Peter Henderson in San Francisco; Editing by Rosalba O’Brien, Toni Reinhold


Report typos and corrections to: [email protected].
READ COMMENTS - JOIN THE DISCUSSION
Continue Reading

Breaking Banner

Michael Avenatti says he has El Chapo’s former jail cell — which the drug dealer described as ‘torture’: report

Published

on

Attorney Michael Avenatti, the colorful attorney who came to prominence representing Stormy Daniels against Donald Trump, is unhappy with his jail conditions.

On Monday, his attorney wrote to the federal judge overseeing his trial to complain about the jail conditions Avenatti is experiencing during pre-trial detention.

Scott Srebnick, Avenatti's attorney, wrote to Judge Paul Gardephe to complain about the "notorious 10-South" section of the Metropolitan Correctional Center, where he is being held in the Special Housing Unit.

"He is in a cell reportedly once occupied by El Chapo, on a floor that houses individuals charged with terrorism offenses," Avenatti's attorney wrote.

Continue Reading

Breaking Banner

It is Greta Thunberg vs Donald Trump at climate-focused Davos gathering of economic elites: report

Published

on

The starkly opposed visions of US President Donald Trump and Swedish teen activist Greta Thunberg on climate change will clash in Davos on Tuesday as the World Economic Forum tries to face up to the perils of global warming on its 50th meeting.

The four-day gathering of the world's top political and business leaders in the Swiss Alps gets under way seeking to meet head-on the dangers to both the environment and economy from the heating of the planet.

Trump, who has repeatedly expressed scepticism about climate change, is set to give the first keynote address of Davos 2020 on Tuesday morning, on the same day as his impeachment trial opens at the Senate in Washington.

Continue Reading
 

Breaking Banner

‘Which Senator up this year most deserves to lose?’: Preet Bharara flooded with replies to provocative question

Published

on

Former United States Attorney Preet Bharara asked his 1.2 million Twitter followers a provocative question on the eve of President Donald Trump's impeachment trial.

With worries that Senate Majority Leader Mitch McConnell (R-KY) is presiding over a sham trial, many analysts have suggested that the Senate itself will be on trial.

"Which Senator up this year most deserves to lose?" Bharara, who was fired by Trump, asked.

There are a number of potentially vulnerable Republicans facing voters in 2020, including McConnell himself, Sen. Joni Ernst (R-IA), Sen. Susan Collins (R-ME), Sen. Martha McSally (R-AZ), Sen. Cory Gardner (R-CO), Sen. Thom Tillis (R-NC), Sen. John Cornyn (R-TX), Sen. Steve Daines (R-MT) and Sen. Lindsey Graham (R-SC).

Continue Reading
 
 
Help Raw Story Uncover Injustice. Join Raw Story Investigates for $1 and go ad-free.
close-image