Tesla CEO Musk accused of defrauding shareholders, sued by investors

Tesla's board might not know where Elon's 'secure' funding is coming from

Tesla's board might not know where Elon's 'secure' funding is coming from

According to the case filed by the investors, Elon Musk posted the manipulative tweet to increase the share costs higher and narrow the sellers that were bidding against Tesla.

On Tuesday, Musk tweeted that he was considering taking the electric vehicle company private and that he had secured funding, valuing the company at $420 a share.

Tesla was hit with another class-action lawsuit Friday, growing out of CEO Elon Musk's tweeted remark that he was considering taking the company private.

As of Thursday, 34.75 million Tesla shares were sold short, up from 34.67 million shares on Monday, S3 data showed. The main accusation against both is that they perpetrated a fraud on the shareholders of Tesla by misleading that the company is being turned into a privately held company.

Tesla did not respond to a request for comment.

The transaction could amount to at least $50 billion if Musk keeps his 20 percent stake in the company.

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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.

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".

Musk's August 7 tweets, including when he said there was "funding secured" to possibly take Tesla private, helped push Tesla's stock price more than 13 percent above the prior day's close.

Wall Street analysts have expressed doubts about the billionaire' s ability to gather enough financial backing to complete a going-private deal. Tesla shares are now up just 3.6 percent from where they traded prior to Muck's tweet and are 16.1 percent below the reported $420 takeover price.

Securities laws forbid market manipulation by corporate leaders who announce pending stock purchases or sales when they have no intention or no means of carrying them out.

Tesla has yet to make a public statement on the matter. It is called Isaacs v. Musk, 18-cv-04865, U.S. District Court, Northern District of California (San Francisco).

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