(Reuters) – A federal judge said Tesla Inc must face a lawsuit claiming it misled shareholders when Chief Executive Elon Musk tweeted in August 2018 that he was considering taking the electric car company private.
U.S. District Judge Edward Chen ruled on Wednesday that shareholders could try to prove Musk’s tweet was the “proximate cause” of volatility in Tesla’s stock price, causing billions of dollars of alleged losses that prompted the lawsuit.
Musk had tweeted on Aug. 7, 2018: “Am considering taking Tesla private at $420. Funding secured.”
It was later established that he had not lined up funding, and Musk backed down from the going-private offer.
Tesla did not immediately respond to a request for comment.
(Reporting by Jonathan Stempel in New York; Editing by Tom Brown)
