Tesla sinks after a notorious short-seller sues Elon Musk over his alleged attempt to burn investors like him
- Notorious short-seller Andrew Left of Citron Research has filed a lawsuit against Tesla and Elon Musk.
- Left says Musk's "funding secured" tweet was merely a way to burn investors like him who were betting against Tesla's stock price.
- Watch Tesla trade in real-time here.
Tesla is facing yet another lawsuit stemming from CEO Elon Musk's failed bid to take the electric-car maker private, this time from a notorious short seller Andrew Left.
The founder of Citron Research alleged in a California court filing Thursday that Musk's "funding secured" tweet - which sent Tesla shares up 11% in a matter of hours - was sent simply to burn short sellers, who lost more than $3 billion during the stock's surge.
Shares of Tesla fell roughly 3.8% off their intra-day highs following the filing of the suit, and are now little changed for the session.
"Defendant Musk has a long-standing public feud with short-sellers," Left's attorney, James Wagstaffe, said in the filing. Musk's "statements were an ill-conceived attempt to artificially manipulate the price of Tesla securities in order to "burn" and "squeeze out" the Company's short-sellers," he continued.
It's not the first lawsuit to hit Tesla in the wake of Musk's go-private attempt, but it is the first to allege it as a purposeful "short burn" rather than just a manipulation of the stock's price. Revelations by Tesla that funding was not actually secured, as Musk had originally tweeted, have spurred an investigation by the Securities and Exchange Commission, the US's top stock market regulator.
Tesla did not immediately respond to a request for comment about the lawsuit.