Elon Musk Got 1.4 Million Dollars Richer Because Of A Tweet

14 August, 2018, 18:24 | Author: Salvatore Jensen
  • Tesla's board might not know where Elon's 'secure' funding is coming from

Two investors filed suit against Tesla CEO Elon Musk and the electric auto company after he tweeted he wanted to take the firm private, causing the share price to inflate and short-selling investors to lose millions.

On Tuesday he tweeted that he had secured funding to buy all Tesla shares and take the company private.

The tweets are aimed at "shorts", or investors who borrowed shares of Tesla and immediately sold them with the hope that Tesla's share price would fall. Even the SEC is in on the game, requesting that Musk disclose a lot more than "funding secured", a phrase that sent tremors throughout the investing world. It is called Isaacs v. Musk, 18-cv-04865, U.S. District Court, Northern District of California (San Francisco).

Tesla has yet to comment on the lawsuits.

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. Tesla shares rose as much as 3.5 per cent after the report, which came after the close of regular trading, and have pared some of that gain since.

Musk has been active on Twitter this year, fighting back against investors betting against his stock and other detractors, often with controversial comments.

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.




A Musk investigation might be a best-case scenario for Tesla shorts, but CNBC's Jim Cramer said an investigation is a longshot.

Tesla shares were down -0.9 percent at $355.78, on Friday morning.

Irons has a small position in out-of-the money put options on Tesla that make money if the stock declines.

Emboldened, shorts have pushed Tesla short interest percentage to 27.3 percent of the float on Thursday, up from 27.2 percent on Monday, S3 data showed.

"It is clear that Defendant Musk Tweeted materially false and misleading information regarding the Going Private Transaction to exact personal revenge and "squeeze-out" the short-sellers who had purportedly been badgering him for months", the complaint filed by Isaacs states.

Einhorn revealed the losses to his investors in Greenlight's letter while questioning Tesla investors, saying shareholders seemed to be backing the long-term growth of the company while Tesla appears to be focusing on "very short-term goals".

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