Elon Musk Got 1.4 Million Dollars Richer Because Of A Tweet

Einhorn gets box of ‘short shorts’ after sparring with Elon Musk

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Tesla Inc. (TSLA.O) and Elon Musk were sued by an investor over wild share price swings following the chief executive officer's August 7 tweet saying he was considering taking the company private.

Kalman Isaacs, one of the investors who filed suit Friday in a San Francisco court, claimed Musk's tweets were "designed to completely decimate short-sellers".

In one of the lawsuits, the plaintiff Kalman Isaacs said Musk's tweets were false and misleading, and together with Tesla's failure to correct them amounted to a "nuclear attack" created to "completely decimate" short-sellers. Musk's tweet about taking Tesla private sent the stock soaring 11 percent Tuesday and cost short sellers roughly $1 billion, according to some estimates.

The lawsuits filed by Isaacs and William Chamberlain said Musk's and Tesla's conduct artificially inflated Tesla's stock price and violated federal securities laws.

One expert, Jill Fisch, a business law professor at the University of Pennsylvania Law School, said Chamberlain's and Issac's lawsuits will only be successful if they can prove Musk and Tesla did not actually seek or "secure" funding for the transaction. The remark set off a frenzy of trading in Tesla shares, even as investors were struggling to discern whether the tweet was legitimate and what precisely it meant.

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Tesla's board has allegedly not yet received comprehensive information regarding the finances required to take the company private, Reuters reports, citing sources familiar with the matter.

Musk also said, with characteristic Kanye West arrogance, that the Tesla stock is "the most shorted stock in the history of the stock market" and that, as it is publicly traded, "there are large numbers of people who have the incentive to attack the company".

The US Securities and Exchange Commission is understood to have already opened an inquiry into Mr Musk's tweets.

According to the complaint, Isaacs bought 3,000 Tesla shares on August 8 to cover his short position, or bet that the price would decline, in the company.

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