Elon Musk, the founder of Tesla and SpaceX, was sued twice on Friday by investors for manipulating share prices, Reuters reports. This comes after Musk tweeted a bombshell post this week, bringing forward the idea of the electric car company going private in a deal worth $72 billion.
Am considering taking Tesla private at $420. Funding secured.— Elon Musk (@elonmusk) 7 августа 2018 г.
According to the lawsuit complaints, Musk lied that the funding for the deal to privatize Tesla was "secured" so as to push shares higher. The move is claimed to have hurt short sellers, investors who borrow shares to later sell them at a lower price and then repurchase them to make a profit. The plaintiffs claim that Musk's tweet was meant to "completely decimate" short-sellers by forcing them to buy Tesla securities at "artificially inflated prices."
Tesla's stock initially rose 11 percent to almost $380, but then it fell back, losing almost two-thirds of the gain over two days, as Elon Musk didn't reveal any further details on the proposal.
Pressure has also built on Tesla's CEO as the US Securities and Exchange Commission has contacted his company for a back-up to his claims.
The news drew plenty of reactions from critics on social media, with some calling Musk's proposal a "fraudster move."
Catching up on events. So @elonmusk wants to make $TSLA private but still would like to have *all* investors remain. Well, then what's the point of going private again? sounds like that's solely for the purpose of hiding this scam from the skeptics. $TSLAQ— Harsh (@lazygetter) 11 августа 2018 г.
Trying to take Tesla private is a fraudster move. The word is: desperation.— Machine Planet (@Paul91701736) 11 августа 2018 г.
Exactly — he wants all the benefits of a public company without any of the responsibilities.— Scott J, CFA (@RyeNotBerben) 10 августа 2018 г.
Elon needs to take care of this keyboard diarrhea, because tweeting random crap is gonna cost him money.— Michael Overby (@mikeX74) 10 августа 2018 г.
Some argued that no investor is going to finance the deal, including the government.
It's a joke. Who has 90 billion to give a company that does not make a dime? Oh maybe the government but that's not going happen.— edfish (@edfish01) 11 августа 2018 г.
Others went further to accuse the tech South African tech billionaire of outright lying.
Hi @elonmusk where do I sign up to join a wide pool of investors that don’t like pesky things like accountability but love investing in companies under SEC investigations with a CEO who has a history of lying? pic.twitter.com/9Ifz8zfALZ— ArtkoCapital (@ArtkoCapital) 10 августа 2018 г.
Tesla is an electric car maker that rolled out the world's first ever premium electric sedan. In Q2 2018, the company posted a $717.5 million net loss and a loss of $3.35 per share with revenues of $3.4 billion.