Kaplan Fox Announces Investor Class Action Lawsuit Filed Against Tesla, Inc.
NEW YORK, Aug. 15, 2018 /PRNewswire/ -- Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) has filed a class action suit against Tesla, Inc. ("Tesla" or the "Company") (NASDAQ: TSLA) and Elon R. Musk ("Musk"), Tesla's Chairman, Chief Executive Officer and co-founder, that alleges violations of the Securities Exchange Act of 1934 on behalf of all persons and entities who purchased the publicly traded securities of Tesla from at least as early as August 7, 2018 through August 14, 2018, inclusive (the "Class Period"). The case is pending in the United States District Court for the Northern District of California.
The complaint alleges that on August 7, 2018 starting at 9:48am, Musk began issuing public statements on Twitter that he intends to take Tesla private (the "Going-Private Transaction"). Specifically, Musk tweeted the following statements, among others:
- "Am Considering taking Tesla private at $420. Funding secured."
- "Shareholders could either to sell [sic] at 420 or hold shares & go private."
- "Investor support is confirmed. Only reason why this is not certain is that it's contingent on a shareholder vote."
According to the complaint, in reaction to Musk's statements, the price of Tesla's common stock increased reaching an intra-day high of $387.46 per share, $45.47 per share higher than the previous day's closing price, and closed at $379.57 per share on August 7, 2018, an increase of $37.58 per share, or approximately 11%.
The complaint further alleges that the tweets and other statements made by Musk were materially false and/or misleading, and failed to disclose (1) that the Defendants had not secured funding for the Going-Private Transaction; (2) that Musk's statements that the Going-Private Transaction only required shareholder approval were false since the Going-Private Transaction required approval by the Company's Board of Directors and even the Board was unaware of the funding referred to by Musk; (3) that the status and likelihood of the Going-Private Transaction was misrepresented to the market because financing for it had not been secured and Board approval was required; and (4) as a result of the foregoing, Defendants' statements about Tesla's business, operations, and prospects, were materially false and/or misleading and/or lacked a reasonable basis.
According to the complaint on August 8 and 9, 2018, the truth began to be revealed as investors learned that the Going-Private Transaction was still being evaluated and could be rejected by the Board. This allegedly contradicted Musk's representation the prior day that the Going-Private Transaction was all but certain, with only a shareholder vote needed to complete it. Additionally, investors learned that Musk's tweet was the subject of an SEC inquiry.
On August 8, 2018, Tesla's shares fell $9.23 per share, or 2.4%, to close at $370.34 per share.
On August 9, 2018, Tesla shares fell by $17.89 per share, nearly 5%, to close at $352.45 per share, resulting in a two-day decline of more than 7%.
The complaint further alleges that on August 13, 2018, after the markets closed, Musk tweeted "I'm excited to work with Silver Lake and Goldman Sachs as financial advisors, plus Wachtell, Lipton, Rosen & Katz and Munger, Tolles & Olson as legal advisors, on the proposal to take Tesla private."
However, according to the complaint, on August 14, 2018, Bloomberg published an article entitled "Goldman Is Said to Have No Mandate When Musk Tweeted," reporting that neither Goldman Sachs or Silver Lake were yet working with Musk pursuant to a signed agreement or in an official capacity when Musk said on Twitter late Monday, August 13, 2018, that both firms were working with him as financial advisers.
Following this news, Tesla's shares fell $8.77 per share, or nearly 2.5%, to close at $347.64 per share on August 14, 2018.
If you purchased Tesla securities during the Class Period, you may move the court no later than October 9, 2018 to serve as a lead plaintiff for the Class. You need not seek to become a lead plaintiff in order to share in any possible recovery. If you would like to review a copy of the Complaint filed in this action or discuss our investigation, please contact us by emailing [email protected], or [email protected], or by calling 800-290-1952.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
Kaplan Fox & Kilsheimer LLP, with offices in New York, San Francisco, Los Angeles, Chicago and New Jersey, has many years of experience in prosecuting investor class actions. For more information about Kaplan Fox & Kilsheimer LLP, you may visit our website at www.kaplanfox.com. If you have any questions about this Notice, the action, your rights, or your interests, please contact:
Donald R. Hall
KAPLAN FOX & KILSHEIMER LLP
850 Third Avenue, 14th Floor
New York, New York 10022
(800) 290-1952
(212) 687-1980
Fax: (212) 687-7714
E-mail address: [email protected]
Laurence D. King
KAPLAN FOX & KILSHEIMER LLP
350 Sansome Street, Suite 400
San Francisco, California 94104
Telephone: (415) 772-4700
Fax: 415-772-4707
E-mail address: [email protected]
SOURCE Kaplan Fox & Kilsheimer LLP
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