Short-sellers rallied to the defence of one of Tesla’s critics after the electric carmaker obtained a restraining order against the California-based man over allegations he was trespassing on its property and harassing employees.
Supporters of the man, who tweets under the handle @skabooshka and has frequently said Elon Musk, the electric carmaker’s chief executive, should go to prison for fraud, raised almost $90,000 in two days to pay his legal bills.
The carmaker, which is due to report quarterly results on Wednesday, obtained the court order on Friday against a 32-year-old resident of Fremont, California, named Randeep Hothi, according to court records.
Mr Hothi, who describes himself on Twitter as “investigating/reporting on corporate fraud. Currently focusing on corporate wrongdoing and Tesla,” frequently uses the hashtag $TSLAQ, which is favoured by those who believe the company will fail.
Marc Cohodes, a prominent short-seller who donated to support Mr Hothi, said that “what Elon Musk and Tesla are doing to this kid — and he is a kid — is absolutely criminal”.
“It’s part of the worldwide retaliation against speaking truth to power that’s going on right now,” he added. Mr Musk “is all for free speech until it’s against him”.
Tesla has been a frequent target for short-sellers and sceptics who view Mr Musk’s sometimes-grandiose ideas and promises of new products and projects at odds with the company’s performance, delayed delivery of cars, safety record and a management and board exodus. The stock has been one of the most heavily-shorted in recent years.
Mr Musk has often fired back at the short-sellers, at one point sending Greenlight Capital founder David Einhorn a box of short shorts after the hedge fund manager said he had lost money on a short position in the carmaker last year. More recently, Tesla’s share price has faltered, falling below $263 after rising as high as $380 last year.
It is not only activist short-sellers — the outcasts of the finance world who bet on the demise of companies — who have been unimpressed with the carmaker. The Tesla bear camp on Wall Street is also swelling, with analysts at Evercore ISI downgrading their rating on Monday, citing demand concerns and growing competition from rivals.
The temporary restraining order means Mr Hothi has to stay at least 100 yards away from Tesla’s Fremont factory or certain of its employees, as well as 10 yards away from any Tesla vehicle with manufacturer plates within five miles of the factory, at least until a hearing on May 7.
Tesla’s lawyers said Mr Hothi is “a vocal Tesla detractor,” who “tweets extensively about his desire to see Tesla (and its Autopilot technology) fail”.
“In recent months, respondent’s conduct has escalated and has resulted in violent and intimidating confrontations with Tesla employees,” the company said in legal papers filed on Friday in a California state court.
The carmaker alleges that several of its employees “have suffered actual and threatened violence” from Mr Hothi, including an instance where the carmaker claims he hit a security worker with his car when he was told to leave an employee parking lot. The man “suffered minor injuries”, Tesla said.
In another instance, Mr Hothi allegedly “stalked, harassed and endangered” three Tesla employees who were testing the Model 3’s Autopilot feature by driving erratically in proximity to them for about 35 minutes.
The company also alleged he has taken photos and videos of the company’s Fremont factory employee parking lots and posted them online.
The fundraising for Mr Hothi was led by Lawrence J. Fossi, a short-seller who writes under the pseudonym Montana Skeptic. He launched a fundraising site on GoFundMe.com on Saturday for Mr Hothi’s legal defence fund, setting an initial goal of $20,000.
He has been supported by short-sellers including Mr Cohodes, Mark Spiegel of Stanphyl Capital and Chris Irons, who runs Quoth the Raven Research. Mr Irons is matching any donations to his podcast made before the end of the month to Mr Hothi’s legal defence, as well.
“I’m extremely curious as to whether or not Tesla will be able to back up their allegations in the upcoming evidentiary hearing,” said Mr Irons. “So far, all I see are allegations. For me, the burden is on Tesla to prove what they allege in their TRO request.”
On Monday, Mr Hothi thanked his supporters on Twitter.
“The pendency of Tesla’s lawsuit against me makes it prudent for me to say little on Twitter at present,” he said. “But I do wish to express my profound thanks for the outpouring of support here and at the GoFundMe page. I am deeply moved by your kind words and generosity.”
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