Short sellers, one of the reasons Musk cited in the employee email as inspiring him to want to go private, could certainly claim that Musk was trying to manipulate the stock, especially if he cannot or will not prove his claim that the money for a buyout has already been pledged.
“If this is not a serious bid, the short sellers can sue on the grounds that this is an artificial and fraudulent manipulation of the stock, which violates Rule 10b-5,” John Coffee Jr., a law professor and director of the Center on Corporate Governance at Columbia Law School, said in an email. “Remember too that he made an objective statement and not just a statement of possible intent — namely, he said ‘financing secured.’ If that is not true, he is in deep trouble.”