- Elon Musk bought shares of Twitter in March and April and is already the largest shareholder of the social network with 9.21%.
- He then made an offer of 44 billion for 100%, but before that he criticized the firm.
- The plaintiffs say he manipulated the share price by speaking out as a shareholder.
The purchase of Twitter by Elon Musk is still without definitions. However, who until now is the majority owner of shares of that social network must face a lawsuit. Several, strictly speaking.
That’s right, a group of Twitter investors accuse him of manipulate the share price with their public statements.
Investors filed the complaint against Musk saying that the co-founder of Tesla and other companies like SpaceXis intentionally manipulating the price of shares in the social network.
They assure that he is doing it to lower the value of the shares after his offer of US $ 44 billion, which was accepted by the company’s board of directors, but has not yet materialized.
Complaints are added against Elon Musk
In the complaint, the investors explain that the South African tycoon made intentional speculative maneuvers so that the stock price fell. And that he materialized them before making the offer.
The plaintiffs claim that Musk did not disclose that he had already acquired more than 5.5 percent of the company’s shares on March 15 and that he only did so in April, when he was already the largest shareholder in the social network, having bought 9.21 percent.
By hiding it, the investors in the lawsuit explain, violated the rules of the US Securities and Exchange Commission (SEC).
In parallel, investors say that a “cascade” of statements by Musk after the takeover offer is also part of stock price manipulation practices.
They point to the businessman’s statements on Twitter in relation to the suspension of negotiations due to doubts about the number of bot accounts and the span on the network.
Those Musk posts were, to the plaintiffs, intentionally aimed at lowering the value of the company with the aim of buying Twitter at a lower price.
The idea of the plaintiffs is to be able to articulate a collective lawsuit.
Specifically, they request compensation for damages to their holdings of shares in Twitter.
“The fish dies by the mouth”
In line with the latest complaint, in April, another lawsuit claims that Musk saved $150 million by not disclosing that he had bought 5% of Twitter shares.
And there are more complaints: a Florida pension fund filed a lawsuit against Musk for violating a law that prohibits the acquisition of the firm until 2025.
Now read:
Elon Musk’s plan to buy Twitter is ready: this is it
“Poison pill”: Twitter’s mechanism to prevent the purchase of Elon Musk
Global advertising and marketing do not want Twitter in the hands of Musk