Isaacs v. Tesla, Inc. et al 3:18-cv-04865 — On August 10, 2018, investors sued Tesla, Inc. (“Tesla” or the “Company”) in United States District court, Northern District of California, San Francisco Division. Plaintiffs in the Tesla class action (TSLA Class Action) allege that they acquired Tesla stock at artificially inflated prices between August 7, 2018, and August 8, 2018 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. For more information about the TSLA Lawsuit, please contact us today!

Summary of the Allegations

Company Background

Tesla (NASDAQ:TSLA) has been in business since 2003, when a group of engineers launched it in order to prove that “people didn’t need to compromise to drive electric – that electric vehicles can be better, quicker and more fun to drive than gasoline cars.”

Today, the Company produces several all-electric vehicles including the Model S and the Model X. In the last couple of years it has also introduced the Model 3 and the Tesla Semi. Along with the expansion of its product line, the Company says its production plan is “also set to increase to a rate of 500,000 vehicles a year” by this year.

In addition to making electric vehicles, the Company says it is dedicated to creating an “an entire sustainable energy ecosystem.” To this end, it also makes “a unique set of energy solutions…enabling homeowners, businesses, and utilities to manage renewable energy generation, storage, and consumption.”

Summary of Facts

Tesla and its CEO and chairman, Elon Musk, now stand accused of deceiving investors by lying and/or withholding critical information about Tesla’s business prospects during the Class Period.

Specifically, they are accused of using social media (Twitter) to make false and misleading statements about taking the Company “private” and securing the required funds. By knowingly or recklessly doing so, they allegedly caused Tesla stock to trade at artificially inflated prices.

The truth came out in an article published by Bloomberg after the market closed on August 8, 2018. In it, Bloomberg disclosed that, “securities regulators have inquired with Tesla about Defendant Musk’s Tweets.” According to the report, the Securities and Exchange Commission (SEC) specifically asked “whether Defendant Musk’s unusual announcement on Tuesday was ‘factual,’” and “why the disclosure was made on Twitter rather than a regulatory filing.”

Another article published by Bloomberg two days later also questioned whether the funding needed to take the Company private could be secured, much less actually secured, as Musk claimed.

A closer look…

As alleged in the August 10 complaint, the Defendants repeatedly made false and misleading public statements during the Class Period.

For example, in a Tweet posted at approximately 12:48 p.m. Eastern Standard Time on August 7, Musk said in pertinent part: “Am considering taking Tesla private at $420. Funding secured.”

Then, in another Tweet posted less than an hour later, Musk said in relevant part: “I don’t have a controlling vote now & wouldn’t expect any shareholder to have one if we go private. I won’t be selling in either scenario.”

In yet another Tweet posted at 3:36 p.m., Musk stated: “Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote.”

The next day, “several Company directors” issued a statement which said in relevant part: “Last week, Elon opened a discussion with the board about taking the company private, this included discussion as to how being private could better serve Tesla’s long-term interests, and also addressed the funding for this to occur.”

Impact of the Alleged Fraud on Tesla’s Stock Price and Market Capitalization

The following chart illustrates the stock price during the class period:

Actions You May Take

If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.

NOTE: The deadline to file for lead plaintiff in this class action is October 9, 2018. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.

In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in Tesla common stock using court approved loss calculation methods.

Recently Filed Cases

Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action.  Please contact us if you would like an LK report for any of these cases:

About Us

Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse.  With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.

Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients.  Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.

For additional information about this case or our institutional services, please contact us.