'Nuclear attack': Investors sue Musk over 'misleading' tweet on making Tesla private

The Tesla logo is seen outside of their showroom in Washington DC.					Saul Loeb AFP  Getty Images

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 (roughly Rs. 4.97 lakh crores) transaction that valued the company at $420 (around Rs. 29,000) per share, and that "funding" had been "secured".

Tesla did not respond to a request for comment.

"Because Musk has not secured financing, and has issued false and materially misleading information into the market, short sellers of Tesla stock were forced to cover their positions by purchasing shares at artificially inflated prices after 12:48pm on August 7, 2018".

The US Securities and Exchange Commission is understood to have already opened an inquiry into Mr Musk's tweets. Interestingly, Elon Musk has openly criticised the short-sellers through his tweets.

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. He is known for making sarcastic tweets in the past, such as "Stormy weather in Shortville", after reports of Tesla stocks going up.

A second source close to the situation also said PIF was not taking part in any such plan at this stage.

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Tesla shares were trading at $350.69, down about $6 from where they were before Musk's tweet on Tuesday sent them soaring to a near one-year high.

The two separate cases have been filed in a court in the Northern District of California, which is not far from where Tesla is located, Palo Alto.

Tesla has yet to make a public statement on the matter.

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".

Some analysts have suggested that Musk could convince Tesla's top shareholders, such as Fidelity Investments and China's Tencent, to roll their equity stakes into the deal, thereby significantly reducing the amount of money needed to be raised.

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