Tesla shareholders have proposed filing a class-action lawsuit against the company and CEO Elon Musk accusing him of securities fraud, reports Reuters.
The big picture: Shareholders are say Musk’s tweet claiming he would take Tesla private was an attempt to manipulate Tesla’s stock price and ruin plans for short-sellers.
The details: The lawsuit was filed by Keller Lenkner, LLC. on behalf of Tesla’s shareholders. The lawsuit focuses on a statement Musk made on Twitter saying funding for the deal to privatize the company had been “secured,” but claims that statement was false.
- Tesla’s stock rose to $387.46 in reaction to the tweet — a full $45.57 over the previous day’s closing price.
Bloomberg report: Tesla seeking a wide investor pool in its take private plan to avoid concentrating ownership
Tesla Inc. Chief Executive Officer Elon Musk and advisers are seeking a wide pool of investors to back a potential take-private of the automaker to avoid concentrating ownership among a few new large holders, according to people familiar with the matter.
Tesla is holding early discussions with banks about the feasibility and structure of a possible deal, the people said, asking not to be identified as the details aren’t public. They are canvassing investors including large asset managers, the people said.
Billionaire founder Musk would prefer to amass a group of investors who could each contribute part of the funds because he wants to avoid having one or two large new stakeholders in the company, the people said. Deliberations are at an early stage and the company hasn’t yet formally hired a bank to work on the process or made a final decision on how to proceed, they said.
Is this what “funding secured” means?