Elon Musk Sued by Twitter Investors for Delayed Disclosure that he had purchased more than 5% of Twitter shares by March 14.
The group of investors said Elon Musk saved $156 million by failing to disclose that he had purchased more than 5% of Twitter shares by March 14, according to multiple sources. The lawsuit was filed in San Francisco, and William and his co-investors are requesting that the case be classified as a class action. They’re asking for an undisclosed sum in compensation for all punitive and compensatory damages.
According to the investors, Musk continued to buy shares in the social media giant and profited from a low price before finally announcing the purchases in early April.
Elon Musk is being sued for allegedly driving down the price of Twitter’s stock in order to either get out of his $44 billion buyout bid or negotiate a lower price. The suit alleges the billionaire Tesla boss tweeted and made statements intended to create doubt about the deal, which has roiled the social media platform for weeks.
According to the lawsuit, filed on Wednesday in federal court in San Francisco, Musk continued to buy the stock after that and eventually disclosed in early April that he owned 9.2 percent of the company.
Elon Musk Sued by Twitter Investors
Musk’s ability to finance his acquisition of Twitter is in “major jeopardy,” according to the investors because he has pledged his shares as collateral to secure the loans he needs to buy the company.
Musk said last week that his bid to buy Twitter won’t go forward until he has proof of the platform’s spam problem, adding to the uncertainty surrounding his roller-coaster pursuit of the platform. The suit argued that Musk’s tweet that the deal to buy Twitter was “temporarily on hold” defied the fact that nothing in the purchase contract allows for that.
The suit claimed that Musk was well aware that some Twitter accounts were controlled by software “bots” rather than real people, and that he had even tweeted about it before making his offer to buy the company. According to the complaint, “Musk proceeded to make statements, send tweets, and engage in conduct designed to create doubt about the deal and drive Twitter’s stock down substantially.”
The suit claimed that his goal was to gain leverage so that he could get Twitter for a much lower price or back out of the deal without facing any consequences.
“Musk’s market manipulation worked — Twitter’s valuation has dropped by $8 billion since the buyout was announced,” the claim stated.
“Musk’s disregard for securities laws demonstrates how one can break the law and the tax code to enrich themselves at the expense of other Americans,” according to the court filing.
According to the Wall Street Journal, the timing of Musk’s stake disclosure has already prompted an investigation by the US Securities and Exchange Commission (SEC).
Musk pledged an additional $6.25 billion in equity financing to fund his bid for Twitter on Wednesday, indicating that he is working to close the deal despite requiring Twitter to show proof that spam bots account for less than 5% of its users last week.
20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.— Elon Musk (@elonmusk) May 17, 2022
My offer was based on Twitter’s SEC filings being accurate.
Yesterday, Twitter’s CEO publicly refused to show proof of <5%.
This deal cannot move forward until he does.
For More Finance Related News Such As IPO, Stock markets, Please Follow Our Finance News Section