Elon Musk faces legal action over 1 little tweet (and a big share price jump)

With just nine words, the Tesla founder has landed himself in legal trouble.

Claire Reilly Former Principal Video Producer
Claire Reilly was a video host, journalist and producer covering all things space, futurism, science and culture. Whether she's covering breaking news, explaining complex science topics or exploring the weirder sides of tech culture, Claire gets to the heart of why technology matters to everyone. She's been a regular commentator on broadcast news, and in her spare time, she's a cabaret enthusiast, Simpsons aficionado and closet country music lover. She originally hails from Sydney but now calls San Francisco home.
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Claire Reilly
2 min read
Elon Musk

There's no such thing as a low-key tweet when you're Elon Musk. 

Joshua Lott/Getty Images

"Am considering taking Tesla private at $420. Funding secured."

With those nine little words last week, Elon Musk proved that when you're the head of one of the world's biggest companies, your tweets can cause shock waves (and land you in legal strife).

Musk's tweet kicked off a flurry of speculation about the future of Tesla and an investigation by the US Securities and Exchange Commission. Now, Tesla and Elon Musk are facing legal action, with a number of Tesla investors filing legal complaints against the company and its founder, according to Bloomberg.

The tweet saw Tesla share prices jump (climbing $20 above their opening price within a matter of hours), leaving investors who had "shorted" the stock -- or put money on Tesla's stock price dropping -- questioning whether Musk could back up such market-sensitive claims. 

"Musk's statement that he had secured funding was especially material and significantly moved the market," one shareholder, Kalman Isaacs, wrote in his complaint, according to Bloomberg.

Isaacs claims Musk "has not secured financing" and that his tweet "issued false and materially misleading information into the market." As a result, Isaacs claimed, purchasers of Tesla stock were "injured."

The question of privatisation is still carrying on in financial circles, but for those outside the Wall Street bubble the episode is a timely reminder: When you're as big as Musk, Twitter can be an expensive habit. 

Tesla declined to comment to both Bloomberg and CNET.

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