After Tesla Buyout Tweet, Some Investors Wonder: Where Was Nasdaq?

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

Instead, it's the tweet's final two words, "funding secured", that could create problems.

While Tesla's board released a statement on Wednesday saying Musk discussed with it last week the prospect of going private, Musk has yet to tell it where the backing for a buyout deal would come from, Reuters reported on Thursday, citing a source familiar with the matter.

April 3, 2018 - Musk says Tesla will not need to raise more capital in 2018.

The scribe also reached out to individuals close to 16 tech and financial institutions and they said that they were not aware of any pre-arranged funding for this transactions.

A Tesla spokesman declined to comment on behalf of the company and Musk.

The complaint filed by Kalman Isaacs said Musk's alleged false and misleading tweets on August 7 about a possible going-private transaction, and Tesla's failure to correct them, were a "nuclear attack" on short-sellers that inflated Tesla's stock price and violated federal securities laws.

Dusaniwsky said that, as of Thursday morning, Tesla remained the single most heavily shorted US equity with roughly $12.36 billion in total short interest. Another name being linked with Tesla's take-private deal is SoftBank. So, even if Musk did post the tweet hoping to damage short sellers by boosting Tesla stock price, it wouldn't be illegal unless it were untrue, she said. The company is based in nearby Palo Alto, California. Tesla is the most shorted company on Wall Street, and Musk has been very vocal about his displeasure with short sellers.

The Twitter comments could potentially affect Musk's legal situation.

"The most striking feature of the quarter is that Elon Musk appears erratic and desperate", Einhorn's letter added.

"Short-sellers will go away if he executes on his business plan and will grow in numbers if he doesn't", he said.

That's a hard charge to prove, Pitt said.

Musk could soon be under investigation by the SEC if he can't prove there actually is a reasonable $420 offer on the table. If it did, its punishments could range from imposing hundreds of millions of dollars in fines on Musk or Tesla to barring Musk from ever serving as an officer or director of a public company again, according to Pitt.

Some analysts have suggested that Mr. Musk may be able to convince Tesla's top shareholders, such as Fidelity Investments and China's Tencent, to roll their equity stakes into the deal, thereby significantly reducing the amount of money needed to be raised.

"This whole course of events is highly problematic", Pitt said.

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