Investors sue Tesla's Musk over go-private tweets

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Tesla CEO Elon Musk used Twitter late Friday to taunt investors who have bet against his company, even though his previous Twitter comments have spurred a government investigation and shareholder lawsuits.

The two lawsuits filed by Isaacs and William Chamberlain on Friday alleged that Musk and Tesla's behaviour following the tweets violated U.S. securities law, and artificially inflated the company's share price.

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 transaction that valued the company at $420 per share, and that "funding" had been "secured".

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.

Such investors have always been an irritant for Musk, who has sometimes used Twitter to criticize them.

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Short-selling involves borrowing overpriced shares in the belief that their price will decline, so they can be sold and then bought back at a lower price.

FILE PHOTO: Tesla Motors Inc Chief Executive Elon Musk pauses during a news conference in Tokyo September 8, 2014. "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".

Tesla's board has allegedly not yet received comprehensive information regarding the finances required to take the company private, Reuters reports, citing sources familiar with the matter.

But he added that the conduct of Tesla and its chief executive Mr Musk had caused volatility and cost short-sellers hundreds of millions of dollars.

According to the complaint, Isaacs bought 3,000 Tesla shares on August 8 to cover his short position, or bet that the price would decline, in the company.

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