“Am considering taking Tesla private at $420. Funding secured.”
With those nine little words last week, Elon Musk proved that when you're the head of one of the world's biggest companies, your tweets can cause shock waves (and land you in legal strife).
Musk's tweet kicked off a flurry of speculation about the future of Tesla and an investigation by the US Securities and Exchange Commission. Now, Tesla and Elon Musk are facing legal action, with a number of Tesla investors filing legal complaints against the company and its founder, according to Bloomberg.
The tweet saw Tesla share prices jump (climbing $20 above their opening price within a matter of hours), leaving investors who had “shorted” the stock — or put money on Tesla's stock price dropping — questioning whether Musk could back up such market-sensitive claims.
“Musk's statement that he had secured funding was especially material and significantly moved the market,” one shareholder, Kalman Isaacs, wrote in his complaint, according to Bloomberg.
Isaacs claims Musk “has not secured financing” and that his tweet “issued false and materially misleading information into the market.” As a result, Isaacs claimed, purchasers of Tesla stock were “injured.”
The question of privatisation is still carrying on in financial circles, but for those outside the Wall Street bubble the episode is a timely reminder: When you're as big as Musk, Twitter can be an expensive habit.
