Shares of Tesla Inc. fell 7% on Friday, as David Einhorn’s hedge fund Greenlight Capital slammed the electric carmaker the day after Tesla CEO Elon Musk mocked the U.S. Securities and Exchange Commission on Twitter.
The sell-off started in morning trading the day after Mr. Musk stirred nerves about a settlement of his securities fraud lawsuit by calling the SEC the “Shortseller Enrichment Commission” on Twitter.
His tweet came hours after a federal judge ordered him and the regulator to justify their settlement.
“Just want to (sic) that the Shortseller Enrichment Commission is doing incredible work,” Mr. Musk, a frequent critic of investors betting against the electric car company, said in the tweet. “And the name change is so on point!”
Going short on Tesla
In its quarterly letter, Mr. Greenlight said on Friday its short position on Tesla was its second-biggest winner in the third quarter. The hedge fund said Mr. Musk has been deceptive and the carmaker’s woes resemble those of Lehman Brothers before its collapse.
Tesla shares plunged last week after the SEC accused Mr. Musk, 47, of fraud over “false and misleading” tweets on August 7 that promised to take Tesla private and said funding had been secured.
The lawsuit threatened Tesla and Musk with a long fight that could have undermined the company’s operations and ability to raise capital.
