Lawsuits accuse Tesla's Musk of fraud over tweets, going-private proposal

Tesla's board might not know where Elon's 'secure' funding is coming from

Even though Elon Musk has been busy looking for money to fund his $72 billion Tesla buyout, or trying to lobby shareholders to stay as private investors, he didn't forgot about keeping promises he's made to his enemies. Instead, it's the tweet's final two words, "funding secured", that could create problems.

Tesla's board has not received a detailed financing plan from Chairma/CEO Musk, and is seeking more information, Reuters reported last Thursday.

In a research note, Bernstein analyst Toni Sacconaghi said, "if no firmer details emerge. investors would likely increasingly debate Musk's credibility and seemingly unhealthy focus on the shares' price and volatility".

The scribe also reached out to individuals close to 16 tech and financial institutions and they said that they were not aware of any pre-arranged funding for this transactions.

The PIF didn't immediately respond to requests to comment. 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. Musk and SoftBank Group's Masayoshi Son held talks previous year that touched on taking Tesla private, two people with knowledge of the discussions have said.

A veteran shareholder lawyer in San Francisco said investors may have a viable claim against Tesla. 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.

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In the days that followed, the SEC got involved, reportedly investigating Musk's online musings about taking the company private . Apart from the Saudi sovereign fund, Musk said he is having talks with other potential investors about his privatization plan.

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In the letter, Einhorn questioned Tesla investors, saying shareholders seemed to be backing the long-term growth of the company while Tesla appears to be focusing on "very short-term goals". "It looks like the large short sellers are holding onto their positions", and increasing the positions at the stock's higher level, he said.

Perhaps that's what was missing when Elon Musk and Masayoshi Son met a year ago. There is no evidence posted by either Elon or Tesla related to the secured finance.

For Musk to be criminally prosecuted and sent to prison, wrongdoing would have to be proved beyond a reasonable doubt. If it did, its punishments could range from imposing hundreds of millions of dollars in fines on Musk or Tesla to barring Musk from ever serving as an officer or director of a public company again, according to Pitt.

Since rising sharply in the immediate aftermath of Musk's statement, Tesla stock has largely given back its gains, closing on Friday at $355.49.

"This whole course of events is highly problematic", Pitt said.

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