Citron Research short-sellers initiate a class-action lawsuit against Tesla and its executive chairman Elon Musk.

Monica McNeil

2018-09-05 08:34:00 Wed ET

Citron Research short-sellers initiate a class-action lawsuit against Tesla and its executive chairman Elon Musk because he might have deliberately orchestrated taking Tesla private to burn investors. This lawsuit alleges that Musk might have inadvertently engaged in stock price manipulation via his premature tweet. Musk may prefer Tesla to go private such that he can steer business decisions without worrying about near-term share price gyrations.

However, taking Tesla private entails large lump-sums of equity funds from outside venture capitalists. This lawsuit sheds skeptical light on whether Musk's premature tweet on funding Tesla to go private should be subject to S.E.C. regulatory scrutiny.

Short-sellers serve as an effective alternative corporate governance mechanism that helps discipline corporate management in major business decisions. Not only do short-sellers pose a major effective threat to incumbent entrenchment and rent protection, but they can also improve stock price efficiency and information content. Short-sellers short shares at artificially high prices, wait a while for negative news about the company, and then buy back these shares at lower prices to earn short-term gains.

The Citron lawsuit against Tesla and Elon Musk represents a classic example of fraudulent stock price manipulation that proves to be detrimental to short-sellers.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Google CEO Eric Schmidt and his co-authors show the innovative corporate culture and mission of the Internet search tech titan.

Daisy Harvey

2020-03-12 09:32:00 Thursday ET

Google CEO Eric Schmidt and his co-authors show the innovative corporate culture and mission of the Internet search tech titan.

Google CEO Eric Schmidt and his co-authors show the innovative corporate culture and mission of the Internet search tech titan. Eric Schmidt, Jonathan Ro

+See More

Michael Woodford provides the theoretical foundations of monetary policy rules in ever more efficient financial markets.

Fiona Sydney

2023-09-07 11:30:00 Thursday ET

Michael Woodford provides the theoretical foundations of monetary policy rules in ever more efficient financial markets.

Michael Woodford provides the theoretical foundations of monetary policy rules in ever more efficient financial markets. Michael Woodford (2003)  

+See More

Bidenomics better balances fiscal deficits and government expenditures with new corporate and capital income tax hikes.

Apple Boston

2021-08-01 07:26:00 Sunday ET

Bidenomics better balances fiscal deficits and government expenditures with new corporate and capital income tax hikes.

The Biden administration launches economic reforms in fiscal and monetary stimulus, global trade, finance, and technology. President Joe Biden proposes s

+See More

Higher public debt levels, interest rate hikes, and subpar Chinese economic growth rates are the major risks to the world economy.

Daphne Basel

2019-01-23 11:32:00 Wednesday ET

Higher public debt levels, interest rate hikes, and subpar Chinese economic growth rates are the major risks to the world economy.

Higher public debt levels, global interest rate hikes, and subpar Chinese economic growth rates are the major risks to the world economy from 2019 to 2020.

+See More

Can the Chinese renminbi become the next dual global reserve currency in addition to the American dollar?

Daphne Basel

2020-08-01 07:28:00 Saturday ET

Can the Chinese renminbi become the next dual global reserve currency in addition to the American dollar?

Technological advances, geopolitical risks, and pandemic outbreaks cannot shake investor confidence in the American dollar as the global reserve currency.

+See More

AYA Analytica podcast provides fresh insights into the latest stock market news, economic trends, and investment portfolio strategies.

Amy Hamilton

2019-04-30 19:46:00 Tuesday ET

AYA Analytica podcast provides fresh insights into the latest stock market news, economic trends, and investment portfolio strategies.

AYA Analytica finbuzz podcast channel on YouTube April 2019 In this podcast, we discuss several topical issues as of April 2019: (1) Our proprietary

+See More