Elon Musk’s tweet draws Tesla investor lawsuit over share price swings

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And it is unlikely a Wall Street firm would risk backing Tesla, which is burning through about $1 billion a quarter and has not had a single profitable year in its 15 years of existence, said another.

Saudi Arabia's sovereign wealth fund is in talks that could see it becoming a significant investor in Tesla as part of Elon Musk's plan to take the electric vehicle maker private, according to a person with direct knowledge of the fund's plans.

The suit, which was filed in U.S. District Court for the Northern District of California, comes three days after Musk posted a tweet saying that he meant to take the company private at $420 a share and that funding was "secured".

Greenlight Capital president David Einhorn tweeted Friday he got the pairs of short shorts that fellow billionaire Elon Musk promised him last week. Rather, he had Tweeted to decimate the Company's short-sellers who were forced to cover their positions over the succeeding days at artificially inflated prices. In part, due to reports that federal officials are investigating Musk's claims.

Cheddar has reached out to Tesla for comment. While the entrepreneur owns 20 percent of Tesla, more than $60 billion would be needed to buy the business from public shareholders. Discussions began before the controversial August 7 tweet by Musk, who is Tesla's co-founder and chief executive officer, saying he was weighing a plan to take the company private.

Discussions over taking Tesla private have failed before. One of the shareholders, Kalman Isaacs said that Musk has issued a misleading information into the market as the finance is not secured yet.

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"'Funding secured' is a very strong term, and it has legal consequences", Pitt said. The agency would also look at the veracity of the statement Tesla later posted on its website and whether the company should have made additional statements based on what it knew.

Musk, who envisions sending tourists to the Moon and slashing travel times between major cities with advanced trains, is respected in Silicon Valley, where he could tap venture capital.

"We wonder whether surge production techniques to support self-congratulatory tweets are economically efficient ways of ramping production, or whether customers will be happy with the quality of a auto rush through production to prove a point to short sellers", the letter said.

Musk could soon be under investigation by the SEC if he can't prove there actually is a reasonable $420 offer on the table.

Elon Musk has a twenty percent stake of Tesla and he is the largest shareholder.