In this article, we are going to be covering Twitter shareholder sues Elon Musk on the grounds that Tesla CEO manipulated Twitter’s stock for personal profit.
On Wednesday night, a new class-action lawsuit on behalf of Twitter investors was filed against Elon Musk in the San Francisco federal district court, alleging that he has repeatedly manipulated Twitter’s stock for personal profit. The complaint focuses on Musk’s behavior since signing the purchase agreement with Twitter‘s board on April 25th, particularly his recent claim that the transaction “cannot move forward” without further information about automated accounts on the platform.
20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.
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.
— Elon Musk (@elonmusk) May 17, 2022
Twitter shareholder sues Elon Musk for lowering company’s stock prices
The complaint states that following the contract’s signing:
“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 in order to create leverage that Musk hoped to use to either back out of the purchase or re-negotiate the buyout price.”
“As detailed herein, Musk’s conduct was and continues to be illegal, in violation of the California Corporations Code, and contrary to the contractual terms he agreed to in the deal,”
A proposed class-action lawsuit was filed by a small group of shareholders seeking damages to be shared among all holders of company stock.
It’s unusual, but Musk’s conduct isn’t illegal. There has yet to be a clear effort by Tesla CEO Elon Musk to terminate or renegotiate the agreement, despite his strange behavior. The allegations in the lawsuit, on the other hand, have been verified by Twitter’s odd behavior as a stock, which continues to trade significantly below the agreed-upon purchase price.
As of publication time, Twitter shares were trading at less than $40 per share, suggesting that there is a lot of market doubt that the transaction will conclude at $54.20 as planned. The complaint, notably, seeks an injunction from the court, which may force Musk to buy Twitter at the agreed-upon price. If you are not aware of all the details on the purchase of Twitter, here is the full story.
The uncertainty caused by Musk’s public remarks has already had a significant impact on the acquisition offer, lowering Tesla stock to the point that Musk was forced to abandon plans to obtain funding through loans against his holdings in the firm. Last week, Musk informed the SEC that he would provide an extra $6 billion of equity financing to make up for the expired loans.
We hope that you found this article on Twitter shareholder sues Elon Musk informative. If you did, you might also want to check out how the Twitter-Elon Musk deal will affect the crypto market, or Twitter to pay $150M over privacy violations.