• 4 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 7 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 11 minutes Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 14 minutes Wonders of Shale- Gas,bringing investments and jobs to the US
  • 1 hour Evil Awakens: Fascist Symbols And Rhetoric On Rise In Italian EU Vote
  • 4 hours Old - New Kim: Nuclear Negotiations With U. S. Will Never Resume Unless Washington Changes Its Position
  • 1 hour Theresa May to Step Down
  • 8 mins Is $60/Bbl WTI still considered a break even for Shale Oil
  • 33 mins IMO 2020 could create fierce competition for scarce water resources
  • 4 hours India After Elections: Economy And Hindu Are The First Modi’s Challenges
  • 39 mins IMO2020 To scrub or not to scrub
  • 5 hours Total nonsense in climate debate
  • 2 hours Apple Boycott in China
  • 26 mins Devastating Sanctions: Iran and Venezuela hurting
  • 9 hours Trump needs to educate US companies and citizens on Chinese Communist Party and People's Liberation Army. This is real ECONOMIC WARFARE. To understand Chinese warfare read General Sun Tzu's "Art of War" . . . written 500 B.C.
  • 11 hours Level-Headed Analysis of the Future of U.S. Shale Oil Industry
  • 3 hours Compensation For A Trade War: Argentina’s Financial Crisis Creates An Opportunity For China
  • 227 days Epic Fail as Solar Crashes and Wind Refuses to Blow

Tesla Faces 3 Lawsuits Over “Funding Secured” Tweet

Elon Musk

Tesla and more specifically its chief executive Elon Musk are facing three lawsuits over an already notorious tweet by Musk, in which the CEO said he was planning to take the company private and had already secured funding.

It was this phrase, “funding secured”, that alerted the Securities and Exchange Commission, which launched a probe into this claim, prompting Musk to come forward with the revelation that he had for years been in talks with the Saudi sovereign wealth fund to take the company private.

Yet the tweet and the following explanation caused changes in the Tesla stock price within two days, which allegedly affected shareholders who bought Tesla stock in the period.

As the law firm representing plaintiffs in the latest among the three cases states in an update, “On August 7, 2018, Tesla CEO Elon Musk proclaimed via social media that “[a]m considering taking Tesla private at $420. Funding secured,” among other things. On this news, Tesla shares soared to close at $379.57 that day. On August 9, 2018, media reports highlighted a probe by the SEC into the veracity and nature of Musk’s statements as well as an investigation by Tesla’s Board of Directors into the “secured” funding.

On this news, the price of Tesla’s shares plummeted.”

Related: Is Deepwater Drilling More Profitable Than Shale?

All three lawsuits seek class action status, but while the first one seeks to represent shareholders who only bought Tesla shares on August 7 and 8, the second one seeks plaintiffs that bought and sold Tesla stock in the period. The third lawsuit has extended the period, seeking shareholders who bough or sold Tesla stock between August 7 and 10.

The allegations made in the three lawsuits are identical, according to a CNN report: Musk had given misleading information to, basically, get back at short sellers. Yet, the information may not have been misleading if it was true, one legal expert told CNN.

According to Pennsylvania University business law professor Jill Fisch, the lawsuits against Musk and Tesla only have a chance if the plaintiffs can prove that Musk had not sought funding for the operation and had not, in fact, “secured” it.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News