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Short-Sellers Sue Tesla After Musk's 'Going Private' Tweets (bbc.co.uk)
An anonymous reader quotes the BBC:
Elon Musk's bombshell announcement that he is thinking of taking the electric car company Tesla private has landed him a lawsuit from unhappy investors.... His comments caused the share price to shoot up 11% to nearly $380, though it has since fallen back. Short-sellers, who bet on share price falls, allege he misled the market....
Short-sellers, who make a profit by borrowing shares, selling them and then buying them back at an expected lower price, claim to have lost millions thanks to Mr Musk's comments. Plaintiff Kalman Isaacs alleges the announcement was aimed at "completely decimating" short-sellers. His lawsuit, and another filed by William Chamberlain, accuse Mr Musk and Tesla of violating federal securities laws and artificially inflating Tesla's share price. Neither Mr Musk nor Tesla have commented on the lawsuit, which was filed in a federal court in San Francisco.
Tesla "is holding early discussions with banks about the feasibility and structure of a possible deal," Bloomberg reported yesterday -- and Ars Technica points out that if Mr. Isaacs had simply kept his short positions open through Friday, "he would be at least $60,000 richer."
But Isaacs' hopes to be the lead plaintiff for a class-action lawsuit "representing all Tesla shareholders who traded after Musk's tweet on Tuesday or at any time on Wednesday."
Short-sellers, who make a profit by borrowing shares, selling them and then buying them back at an expected lower price, claim to have lost millions thanks to Mr Musk's comments. Plaintiff Kalman Isaacs alleges the announcement was aimed at "completely decimating" short-sellers. His lawsuit, and another filed by William Chamberlain, accuse Mr Musk and Tesla of violating federal securities laws and artificially inflating Tesla's share price. Neither Mr Musk nor Tesla have commented on the lawsuit, which was filed in a federal court in San Francisco.
Tesla "is holding early discussions with banks about the feasibility and structure of a possible deal," Bloomberg reported yesterday -- and Ars Technica points out that if Mr. Isaacs had simply kept his short positions open through Friday, "he would be at least $60,000 richer."
But Isaacs' hopes to be the lead plaintiff for a class-action lawsuit "representing all Tesla shareholders who traded after Musk's tweet on Tuesday or at any time on Wednesday."
Short sellers pissed off that the share price went up? let me see if I an find something small enough to hold the sympathy I feel for them.
SJW n. One who posts facts.
But, Musk should have warned them that there was major news upcoming that could have a serious negative impact on short sellers. You know, like he's been doing pretty much every bloody week recently.
The short argument to the SEC is basically, "Yeah, he warned us, but we didn't believe him! Also, he didn't tell us the exact date and time he would be announcing the news that would have a negative impact on us, or the exact details of what he was going to announce that was going to hurt short sellers. Also: we don't believe him now either!"
Assuming ethanol comes from murdered children and the hydrogen from magic, hydrogen saves 132% more lives than ethanol.
Making materially false public statements about your own company is a securities violation...
he said he had secured financing for going private
he hasn't
end of story
one tweet to many for Muskie
The Tesla short sellers have been doing everything they can including fake announcements, generating rumours and harassing employees, suppliers and investors in order to hurt the share price of Tesla are now upset that Mr. Musk has said enough is enough?
Mimetics Inc. Twitter
"GM's CEO announced that the company produced 13000 cars this week" "Interesting news, Sandra, although if he's lying he'll go to jail." -- said nobody ever.
Here's your logic train:
1) Musk announced news
2) You don't believe the news
3) Giant preemptive scandal without taking any time to substantiate your disbelief.
Meanwhile, preview of the future: here's how it's actually going to play out:
SEC: "Can we see your funding list?"
Musk: "Here you go."
SEC: "Huh, never would have thought that X would be in for that much. And Y's in too? Interesting. Okay, thanks!"
Assuming ethanol comes from murdered children and the hydrogen from magic, hydrogen saves 132% more lives than ethanol.
I've given up trying to keep track of how many times I've seen the Musk haters say "Musk has screwed the pooch this time", "Musk has yet again promised and not delivered" or "Musk doesn't know what he's talking about" only to be proven wrong. If you're so sure that Musk does not have have a plan with investors lined up and has made the announcement without talking to tax attorneys and has placed himself in legal jeopardy could you put your money where your mouth is?
Mimetics Inc. Twitter
First off, he announced the price that he thought was fair, which was 420. That was above it, so, he is legally fine. In addition, I would assume that he had lined up money prior to that announcement, like he said. Assuming that he did, then EVERYTHING was legal and above board.
The real problem is when you have ppl like Chanos, or his good buddy, David Tamberrino, manipulating the stock with loads of lies, well, they are likely the ones that will be getting into trouble with the SEC.
What is really bothersome is that CHanos has been smart about Enron as well as China. But now, he is getting greedy and wanting to manipulate the markets. BIG mistake.
I prefer the "u" in honour as it seems to be missing these days.
why has he screwed up? If he actually got the funding, likely from Saudi Arabia, then everything that he said was accurate.
As such, the SEC can not touch him.
And I suspect that the board knew EVERYTHING about this.
I prefer the "u" in honour as it seems to be missing these days.
"Unhappy investors"? I'm not at all sure that short-sellers qualify as "investors".
"Pump and dump" tactics - buying a cheap stock, talking it up with false positive news stories and then selling it at a profit - are illegal. The reverse - selling a stock short and then making up lies about the company - should be equally illegal.