Tesla shareholder files suit, accuses Musk, electric car firm of securities fraud

A Tesla shareholder filed a lawsuit against the Palo Alto-based electric car manufacturer and CEO Elon Musk, accusing the eccentric billionaire of scheming “to artificially manipulate the price of Tesla stock to completely decimate the company’s short-sellers” and hurting other Tesla securities owners as collateral damage.

Shareholder Kalman Isaacs filed the lawsuit, which seeks class-action status, on Friday with the U.S. District Court for the Northern District of California in San Francisco. Isaacs alleged securities fraud against Tesla and Musk, who on Tuesday tweeted that he was “considering taking Tesla private at $420” and that funding was secured.

Am considering taking Tesla private at $420. Funding secured.

— Elon Musk (@elonmusk) August 7, 2018

Musk’s tweet led to a trading frenzy for Tesla stock on Tuesday afternoon, and it prompted the Nasdaq stock exchange to suspend Tesla stock trading for nearly an hour and a half. Later that day, Musk released a company blog post elaborating on his tweet.

“As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders,” he wrote. “I’m trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible.”

In his lawsuit, Isaacs argued that Tesla and Musk did not address the claim from who, where and how the funding to take the company private was secured in the blog post or in other media.

Start your day with the news you need from the Bay Area and beyond.
Sign up for our Morning Report weekday newsletter.

In a separate follow-up tweet Tuesday, Musk wrote, …read more

Source:: The Mercury News – Business


(Visited 1 times, 1 visits today)

Leave a Reply

Your email address will not be published. Required fields are marked *