Musk sued by Twitter investors for alleged ‘stock manipulation’
- May 28, 2022
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Businessman is accused of avoiding US$ 156 million in losses by delaying to disclose the purchase of company shares before making the offer to acquire the platform
Elon Musk is sued over Twitter takeover offer – Photo:
Twitter investors are suing billionaire Elon Musk for allegedly manipulating the social network’s share price down. The accusations refer to the period before the offer made by the businessman of US$ 44 billion to buy the social network. Twitter is also a defendant in the lawsuit.
Investors say Musk, the world’s richest man, missed $156 million by not disclosing that he had bought more than 5% of the platform by March 14. The action is collective and investors ask for financial compensation, without indicating values.
Investors accuse Twitter of failing to investigate Musk’s conduct, but do not seek damages from the company.
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The shareholder group recalls that Musk continued to buy shares after his first acquisition and, finally, disclosed his operations in early April, when his stake in the company was already at 9.2%.
“By delaying the disclosure of his stake in Twitter, Musk engaged in market manipulation and bought shares in Twitter at an artificially low price,” said the investors, led by William Heresniak.
The lawsuit was filed Wednesday in federal court in San Francisco. Heresniak alleges that Tesla’s founder and CEO violated several California corporate laws. According to the accuser, “false statements [de Musk] and market manipulation created chaos at Twitter’s San Francisco headquarters.”
Musk and his attorney did not immediately respond to requests for comment. Twitter did not comment.
Investors have also claimed that Musk’s public criticism of Twitter is an attempt to further drive down the stock price.
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They cite in the lawsuit a May 13 tweet in which Musk says the deal to purchase was “temporarily on hold” until the company proves that fake accounts account for less than 5% of its users.
Following the takeover announcement, Twitter shares have already dropped about 27% below Musk’s offer price of $54.20.
Source: The Globe