Only days ago Tesla's CEO, Elon Musk, made a rather bold statement via social media.

On Twitter, Musk claimed to have funding secured to take Tesla private at the rich price of $420/share. That would equate to a $70+ billion dollar deal. From what I've read, that would make it the biggest deal to take a company private. Ever.

While Musk & Co. have remained silent regarding the matter, he has pulled off the impossible before. I am not quite ready to write him off as being that much of an ego maniac just yet. I mean, he's not worth $20 billion because he's an idiot.

He couldn't be that stupid to corner himself into potential jail time and class-action lawsuits, could he?

Well, it seems like it very well may be a possibility. Now I am not sure if this particular law firm feels it has a case on its hands or if it's just seeking media attention but it is the first to announce a shareholder-specific, class-action lawsuit.


Press release follows:

SHAREHOLDER ALERT: Kaskela Law LLC Announces Shareholder Class Action Lawsuit Filed Against Tesla, Inc. and Elon Musk, and Encourages Investors to Contact the Firm

Kaskela Law LLC announces that a shareholder class action lawsuit has been filed against Tesla, Inc. ("Tesla" or the "Company") and its CEO, Elon Musk ("Musk"), on behalf of investors who purchased or sold Tesla securities between August 7, 2018 and August 10, 2018, inclusive (the "Class Period").

IMPORTANT DEADLINE: Investors who purchased or sold Tesla securities during the Class Period may, no later than October 9, 2018, seek to be appointed as a lead representative of the investor class. Tesla investors who have suffered financial harm are encouraged to contact Kaskela Law LLC (D. Seamus Kaskela, Esq.) at (888) 715 - 1740, or via http://kaskelalaw.com/case/tesla/, for additional information about this action and to discuss their legal options for recovery.

As detailed in the complaint, on August 7, 2018, defendant Musk stated on Twitter: (i) "Am considering taking Tesla private at $420"; (ii) "Funding secured"; (iii) "Shareholders could either to sell at 420 or hold shares & go private"; and (iv) "Investor support is confirmed." These tweets drove the price of Tesla shares up as much as $45.47 per share, or up as much as about 13%, during intraday trading before closing at $379.57 on August 7, 2018.

However, since that time, both the U.S. Securities and Exchange Commission and Tesla's board of directors are reportedly investigating the truth of Musk's tweets, and whether in fact funding had been secured. Major investors and banks have unanimously stated that they are aware of no such funding. In the face of these investigations and demand for support for the false statements set forth above, defendants have remained silent - evidencing the lack of support for the false statements and driving the price of Tesla's securities down to near pre-tweet levels, with its common stock closing at $355.49 on August 10, 2018.

The shareholder class action complaint alleges that defendants materially misled investors as to the following material facts: (i) contrary to defendant Musk's statements that funding had been "secured" to take Tesla private at $420 per share, no such funding had been secured; and (ii) contrary to defendant Musk's statement that investor support to take Tesla private "is confirmed," there was no such confirmation. As a result of the foregoing, Tesla investors sustained significant investment losses.

Tesla investors are encouraged to contact Kaskela Law LLC at (888) 715 - 1740 or http://kaskelalaw.com/case/tesla/ for additional information about this action and their legal options for recovery. Kaskela Law LLC exclusively represents investors in state and federal courts throughout the country. For additional information about Kaskela Law LLC please visit www.kaskelalaw.com.

CONTACT:

KASKELA LAW LLC
D. Seamus Kaskela, Esq.
201 King of Prussia Road
Suite 650
Radnor, PA 19087
(484) 258 - 1585
(888) 715 - 1740
info@kaskelalaw.com
www.kaskelalaw.com

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MDarringer - 8/11/2018 5:05:30 PM

+2 Boost

Elon needs to be kicked from the company and the company sold to the highest bidder at this point.

mpls - 8/11/2018 5:29:32 PM

+5 Boost

The guys is a fraud and and fool

TomM - 8/11/2018 6:06:23 PM

+4 Boost

This is not going to end well for Musk - since a civil lawsuit is no his worst problem - there will be Federal charges or fines as well.

qwertyfla1 - 8/11/2018 7:55:36 PM

+2 Boost

Musk should buy a big ass law firm as it would be much cheaper to defend himself this way from the shit storm of lawsuits that are bound to hit him rather than just retaining lawyers.

You would have thought the "pedo" comment last month would have instilled some more restraint and common sense but then he drops this bomb. What are the Vegas odds the Tesla BOD file 13 his ass -I don't think they have a choice unless they are giving him a little time to walk the plank? Interesting times indeed!

Vette71 - 8/12/2018 10:46:06 AM

+2 Boost

Law firms are partnerships not companies. Not for sale. He needs to hire the best in the business on retainer. The question is will he listen to them and do what they tell him to do? As you point out, restraint doesn't seem to something in his skill set as this incident clearly indicates. What he does during the next few days will be telling. Show us the money.

MDarringer - 8/12/2018 12:40:12 PM

+1 Boost

They may be partnerships but often they are in fact incorporated.

CANADIANCOMMENTS - 8/11/2018 8:34:49 PM

0 Boost

@Pugproud would know better, but there are alternatives to a traditional Leveraged Buyout.

Morgan Stanley is telling its clients there might a way to get funding for Elon Musk's plan to take Tesla private.

"A Tesla LBO does not appear to be feasible, in our view, even with less than $10bn of incremental debt. However, if the decision is made to take the company private, an equity buyout (or EBO) may be a potentially viable option," analyst Adam Jonas said in a note to clients Friday. "We believe Tesla could consider an auction for its shares in the private equity market, financed by existing shareholders, new strategics, divestiture of valuable captive assets (Tesla autonomous/shared), and possibly some help from SpaceX.

CANADIANCOMMENTS - 8/12/2018 12:20:22 PM

0 Boost

I reached out to a friend who is a CFO at a PE firm. They buy and hold companies in stable businesses that do $50m to $100m a year in sales. His take is that there is so much dry powder on the sidelines globally in the PE space and such a scarcity in quality assets to invest in, that an EBO is very likely what Tesla has in mind. And while some may not think Tesla is an attractive investment, that thought is not shared worldwide, nor by those with a long buy and hold PE investment strategy.

MDarringer - 8/12/2018 1:07:07 PM

0 Boost

I don't reach out to people. I just cut to the chase and call them.

PUGPROUD - 8/12/2018 4:22:35 PM

+2 Boost

Never say never but but a move to go private in my view is next to impossible for Musk. Those speculating that it can be done are "grasping at straws," applying potential ways that are on the far outer fringes or best applied under other circumstances. Unless one party (ie Chinese government, Saudi's, etc) were willing to step up big time (don't see it) I don't see it happening. There are many issues why but paramount in my mind is that the initial cost is high, the need for additional working capital and capital investment is high and hard
to come by when private, and the business prospects still carry high risk. Not a formula for getting someone to step up with billions now and billions more along the way. The public capital markets have served Musk well and his best way ahead until and if a buyer for the whole company can be found. Just my view..

MDarringer - 8/12/2018 9:23:02 PM

+1 Boost

At this juncture, the ONLY value in Tesla is the brand name. Someone should buy the name and put this spit show to rest once and for all.

senft - 8/13/2018 5:53:52 AM

+1 Boost

Every time Musk opens his mouth, it's arguable stock manipulation. However, in the Trumpian sense (taught Donald by mentor/historic POS Roy Cohn), it's fine till one's caught. So no one's done anything about Musk's pronouncements till now. And now may be a huge problem for him. Should have hired people who know how get vehicles manufactured and then use his legendary genius to figure out a way to retain to them. But Elon, who has zero experience in managing a for-profit business, clearly knows much better.
If he's lucky, TSLA will survive as a profitable niche player.

tonyhaddad - 8/14/2018 6:44:20 AM

+1 Boost

It will be interesting to see how this all plays out.