A new day, a new controversy involving Elon Musk. Businessman has been sued by Twitter shareholders, who accuse him of sinking the share price of the social network. The lawsuit highlights several situations involving the CEO of Tesla and SpaceX, both before and after announcing the purchase of the company, which allegedly broke the law.
According to the whistleblowers, Elon Musk made about $156 million by failing to report on time that he had acquired 5% of Twitter shares. “By delaying the disclosure of his involvement on Twitter, Musk manipulated the market and bought shares at an artificially low price, in violation of the California Corporation Code,” the document says.
But the magnifying glass is also on the statements that Elon Musk has made since the deal was announced for 44,000 million dollars. Shareholders consider that the comments where the tycoon assured that the acquisition was “temporarily paused” due to doubts in the numbers of Twitter bots were also detrimental to the value of the company’s shares.
“Musk proceeded to make statements, tweets, and engage in conduct designed to cast doubt on the deal and substantially depress Twitter’s stock price, to create an advantage that Musk hoped to use to withdraw from the purchase or renegotiate its price.” , indicates the demand.
The lawsuit was filed in a federal court in San Francisco, California, and mentions William Heresniak as the main promoter. However, it is expected be endorsed as a class action to represent all those who have invested in the social network founded by Jack Dorsey.
Elon Musk, again under fire for the purchase of Twitter
This is not the first lawsuit Elon Musk has faced since the Twitter purchase was announced. A previous complaint had been filed against the businessman for not reporting the purchase of shares of the social network on time; while his behavior on the platform has already been the subject of multiple controversies.
Beyond what was said by the CEO of Tesla and SpaceX, Twitter indicated that the transaction was going ahead and that it would not change its terms. and even his own Parag Agrawal, current executive director of the social network, acknowledged that he believed that the purchase would materialize. This, despite the fact that Elon Musk had hinted that he considered that the price of the agreement should be reviewed.
For now, Elon Musk continues to work on closing the financing for the acquisition. The businessman will put up another $6 billion of his own assets to free up his Tesla shares as collateral for a bank loan. Recall that he had already committed the support of several investors, such as Binance and a16z, to reduce the margin loan original of 12,500 million dollars.
Returning to the most recent lawsuit against the magnate of South African origin, the document mentions that his promoters intend to receive an unspecified amount for punitive and compensatory damages. In addition, if the request for a precautionary measure is successful, Elon Musk would be forced to buy Twitter at the agreed price of $54.20 per share.