Elon Musk sued over plan to take Tesla private

Elon Musk and Tesla are being sued by investors after the entrepreneur said he had secured funding to take his electric car company private.

Two separate lawsuits, filed after his announcement last week, accuse Musk of violating federal securities laws and making false statements to inflate the company’s share price.

The billionaire shocked investors by tweeting last Tuesday that he had “funding secured” to take Tesla private at $420 (£328) per share. He did not specify where the money would come from.

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His announcement sent the company’s stock price soaring, though it has since fallen back.

The US Securities and Exchange Commission, the Wall Street watchdog, has opened an inquiry into Musk's tweets, according to Sky News.

Short-sellers, who bet on share price falls, claim to have lost millions of dollars as a result of the tech entrepreneur’s comments.

The plaintiff in one of the lawsuits, Kalman Isaacs, said Musk's tweets were false and misleading, and amounted to a “nuclear attack” designed to “completely decimate” short-sellers.

Tesla is the most shorted company on Wall Street, according to CNN Money.

“Musk has been very vocal about his displeasure with short sellers,” it reports. “He's accused them of manipulating the press by planting stories that paint Tesla in a bad light.”

Tesla and Musk have so far offered no comment on the lawsuits.