Elon Musk has landed in hot water over a claim he made on Twitter four-and-a-half years ago.

In an August 7, 2018 tweet, Musk announced: “Am considering taking Tesla private at $420 (US). Funding secured”.

Tesla stock jumped 13 per cent after the tweet, disrupting short sellers caught unaware, and prompting buyers to jump on the stock quickly – which resulted in massive losses when Musk announced he was keeping Tesla public a few weeks, and the stock price immediately tanked.

Investor Glen Littleton has now launched a class action suit against Elon Musk, Tesla, and members of Tesla’s board at the time, on the basis that this tweet was false, and cost investors billions of dollars.

Musk’s lawyers claim that he was serious when he wrote the tweet, and that Saudi Arabia’s sovereign wealth fund had agreed to support the move to take Tesla private.

 

 

 

“Elon Musk’s August 7, 2018 tweet informing the public that he was considering taking Tesla private was entirely truthful,” wrote attorney Alex Spiro in a filing.

“Mr. Musk was considering taking Tesla private at $420 a share. Funding was secured. There was investor support.

“Not only did Mr. Musk firmly believe funding was secured when he tweeted, in reality (per Mr. Musk’s discussions with the PIF) it was secured.”

PIF refers to Saudi Arabia’s Public Investment Fund.

Littleton and the other investors are seeking a judge’s ruling ahead of the May 31 trial that these tweets were false statements.

A hearing is scheduled in March.