On August 10, 2018, the initial complaint in this securities class action was filed against Tesla, Inc. (“Tesla” or the “Company”), and Tesla’s Chief Executive Officer (“CEO”), Elon Musk, asserting violations of sections 10(b) and 20(a) of the Securities Exchange Act.
The complaint alleged that Tesla and the Company's CEO violated the Securities Exchange Act of 1934 by issuing false and misleading statements regarding the CEO taking the Company private. In particular, and importantly, at 12:48pm eastern time on August 7, 2018, the CEO issued a statement via Twitter that "funding" for the deal had been "secured." In reaction to the CEO's tweet, the price of Tesla's stock soared to an intra-day high of $387.46, $45.47 above the previous day's closing price, closing at $379.57 per share. The complaint alleged that the CEO was not telling the truth. 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. Indeed, the price of Tesla stock also remained inflated throughout the next day, August 8, 2018.
This securities class action lawsuit was brought on behalf of all individuals and entities who purchased or sold Tesla securities from August 7, 2018 to August 17, 2018 and were damaged thereby.
Current Status of Case:
On April 15, 2020, the Court denied the defendants’ motion to dismiss the consolidated class action complaint. The lead plaintiff filed a motion for class certification on September 22, 2020. The motion for class certification is currently being briefed by the parties. This action is still ongoing.
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