After Third Car Fire, Investors Sue Tesla
Class-action suit says company misled on safety issues
By John Johnson, Newser Staff
Posted Nov 9, 2013 10:32 AM CST
In this Nov. 6 photo provided by the Tennessee Highway Patrol, emergency workers respond to a fire on a Tesla Model S electric car in Smyrna, Tenn.   (AP Photo/Tennessee Highway Patrol)

(Newser) – Headlines about cars starting on fire tend to do bad things to said car company's stock prices, and investors in Tesla have gotten angry enough to sue. A class-action suit announced yesterday accuses the company of misleading investors on safety issues, reports the San Francisco Chronicle. The suit follows a Model S fire on Wednesday in Tennessee, the third such fire in six weeks. The latest happened when the driver ran over a tow hitch, which punctured the electric car's battery pack. The suit says the vehicle “suffered from material defects which caused the battery pack to ignite and erupt in flames under certain driving conditions.”

It seeks to cover anyone who bought stock from May 10 through Wednesday. In that span, Tesla stock went from $77 to a peak of $193 in September to its close of $138 on Friday. Of course, with the stock dropping, a Los Angeles Times article raises the question, Is it a good time to buy? The short answer from one analyst is not yet. As more Teslas hit the road and presumably get involved in more accidents, it's likely we're going to be reading about more fires until a fix is in place.

More From Newser
My Take on This Story
To report an error on this story,
notify our editors.
After Third Car Fire, Investors Sue Tesla is...
12%
15%
10%
11%
7%
45%
Show results without voting
You Might Like
Comments
Showing 3 of 34 comments
phlanx06
Nov 11, 2013 7:49 AM CST
You should not be able to sue a company because you lost money on an investment unless the company is obviously fraudulent
TwoSheds
Nov 11, 2013 3:11 AM CST
Lawyers file suits like this against every company whenever the stock price drops a little.
ThinkStraightAmerica
Nov 10, 2013 6:42 PM CST
Time to buy stock in Tesla, this CALIFORNIA company has great engineers and reports like these will only make this car company's product better! lol, lets not let Edison destroy Tesla this time around, we all would have a very different world if the "thief" Thomas Edison had not of been able to steal from Nikolai Tesla! http://voices.yahoo.com/nikola-tesla-thomas-edison-genius-the-912459.html