Three days after Elon Musk tweeted that he had “funding secured” to take Tesla private, we still don’t know who, if anyone, has agreed to provide the billions of dollars needed to buy out the company. But plaintiffs’ lawyers aren’t waiting any longer for Musk to provide more details.
On Friday, stock trader Kalman Isaacs filed a class action lawsuit arguing that Musk’s Tuesday tweets constituted securities fraud. The lawsuit, first reported by Reuters, appears to be the first one claiming that Musk’s Tuesday tweets violated federal securities law.
At the time of Musk’s tweet, Isaacs was short at least 3,000 shares of Tesla stock. That means that at some point prior to Musk’s tweet, Isaacs had borrowed Tesla shares and sold them, betting that the price would fall and he would eventually be able to buy them back at a discount, pocketing the difference.