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Investor sues Tesla, Musk over alleged manipulation of stock price

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Investor sues Tesla, Musk over alleged manipulation of stock price

An investor has sued Tesla Inc. and CEO Elon Musk, claiming that the company tried to artificially manipulate its stock price, Reuters reported Aug. 10.

Shareholder Kalman Isaacs filed the proposed class-action complaint in federal court in San Francisco, according to the report.

Isaacs reportedly alleged that Musk and the company committed securities fraud in a scheme to "completely decimate" short-sellers. He claimed Musk's take-private tweet was a part of that scheme.

Musk stunned investors Aug. 7 by tweeting his interest in taking Tesla private at $420 a share, following reports that Saudi Arabia's sovereign wealth fund acquired about 3% to 5% of shares in the electric vehicle maker. Shares closed about 11% higher in heavy trading after his statements.

"Am considering taking Tesla private at $420. Funding secured," Musk posted on Twitter.

Tesla did not immediately respond to S&P Global Market Intelligence's request for comment.

According to Reuters, the investor accused Musk of making false and misleading statements to inflate Tesla's stock price.

Isaacs bought 3,000 Tesla shares Aug. 8 to cover his short position in the company, the news outlet reported.

The news comes on the heels of a Bloomberg News report that Musk and advisers are looking to line up a large group of investors for Musk's proposal. The CEO reportedly wants to avoid concentrating ownership among a few new large stakeholders.

The company's stock has lost all the gains that followed Musk's take-private tweets. Tesla shares were down 0.84% to $352.52 in after-hours trading Aug 10.