Tesla CEO Musk taunts short sellers amid legal scrutiny

Tesla CEO Musk taunts short sellers amid legal scrutiny

That news helped boost Tesla's stock price.

Two investors filed suit against Tesla CEO Elon Musk and the electric vehicle company after he tweeted he wanted to take the firm private, causing the share price to inflate and short-selling investors to lose millions. Beyond amassing a stake of just below 5 percent in Tesla, the sovereign wealth fund has poured tens of billions of dollars into technology investments, including $45 billion in SoftBank Group Corp's (9984.T) Vision Fund over five years.

It said this occurred largely through a series of tweets by Musk on August 7, including when he said he might take Tesla private and that there was "funding secured".

Elon Musk - the founder, CEO, and lead designer at SpaceX, and the co-founder of Tesla - speaks at the International Space Station Research and Development Conference in Washington, US, July 19, 2017.

A veteran shareholder lawyer in San Francisco said investors may have a viable claim against Tesla. A spokesman for PIF was not immediately available for comment.

There's a nagging question on Wall Street after Tesla Inc. Musk and his advisers are seeking a wide pool of investors to back a potential take-private of the automaker to avoid concentrating ownership among a few new large holders, according to people familiar with the matter.

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"I have not seen significant short covering in Tesla since Elon Musk's tweets", Dusaniwsky told Benzinga.

Musk could soon be under investigation by the SEC if he can't prove there actually is a reasonable $420 offer on the table.

Discussions over taking Tesla private have failed before.

Musk had raised the go-private possibility with the board last week, according to a statement from six of Tesla's nine directors. The discussions failed to progress due to disagreements over ownership.

A second source close to the situation also said PIF was not taking part in any such plan at this stage.

Investment bankers and analysts have so far reacted with scepticism, telling Reuters it would be hard for Musk, whose net worth is pegged by Forbes at $22 billion, to raise the equity and debt financing needed for the deal given Tesla is not turning a profit.

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