Tesla Motors Inc (NASDAQ:TSLA) Faces Lawsuit Filed by Pomerantz Grossman Hufford Dahlstorm & Gross LLP
Tesla Motors Inc (NASDAQ:TSLA) along with some of the company’s officers are up against a lawsuit filed by Pomerantz Grossman Hufford Dahlstrom & Gross LLP. This lawsuit has been initiated on behalf of stakeholders, who received Tesla securities somewhere between 6th and 10th of May, 2013. The case has been filed in Northern District Court, California, US.
This class of customers are hoping for compensation for the alleged infringements of Rule 10b-5 of “Federal Laws” and “Securities Exchange Act of 1934’s” section 10(b) plus 20 (a). Each and every stakeholder who received Tesla securities within this class period are eligible to be appointed as the class’ Lead Plaintiff until the 7th of January, 2014.
Tesla Motors are manufacturers, developers and sellers of electric vehicles and their electric components along with the flagship vehicle Model S. The lawsuit claims that Tesla Motors made deceptive statements for this class period without mentioning negative facts about the business that include the highest safety ratings for Model S, defects of the battery packs, introduction of the company’s next generation of Model X, future sales and weakness of the future models to carry on the risks faced by the current Model S that include errors in the design of its battery pack.
The company was also downgraded by analysts after the Model S’ roadside burning video was made public on the 2nd of October, 2013; the video brought to light the execution risks of the model. Shares of Tesla went down to $12.05 a share, declining by over 6% and ended at a value of $180.95 after the news surfaced.
Model S again faced a catching-the-fire incident on the 28th of October, 2013 in Mexico. Shares of Tesla once again went down to $7.32 a share and declined by over 4.3% and closed at $162.86 after the news was made public.
On the 5th of November, Tesla’s stocks ended at $176.81. Company’s results for the third quarter were also disappointing. Tesla’s shares opened at a value of $154.81 on the 6th of November at $22.00 a share; this figure was 12.44% less as compared to the closing price of the previous day. The shares fell down to the value of $139.77 on the 6th and 7th of November, 2013. Tesla again owned up to a third fire incident of Model S that resulted due to a collision of the vehicle with debris on the road.
In the premarket, shares of Tesla Motors Inc (NASDAQ:TSLA) went down by -0.82% ($121.10).