Musk Sued By Twitter Investors Over Alleged Stock ‘Manipulation’

Twitter investors have sued billionaire Elon Musk for allegedly manipulating the social network’s share price down.

The accusations refer to the period prior to the announcement of a US$ 44 billion agreement for the acquisition of the social network by the businessman.

Investors said Musk missed $156 million by not disclosing that he had bought more than 5% of Twitter by March 14. The action is collective and investors are seeking an unspecified amount for punitive and compensatory damages.

Investors also named Twitter a defendant, arguing that the company had an obligation to investigate Musk’s conduct. They, however, do not seek compensation from the social network.

The shareholder group said Musk continued to buy shares after that and finally disclosed in early April the 9.2% stake in the company, according to the lawsuit filed Wednesday in federal court in the city. North American city of San Francisco.

“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.

Musk and his attorney did not immediately respond to requests for comment. Twitter did not comment.

In the lawsuit, investors said the recent crash in Tesla shares, in which Musk is chief executive, put the billionaire’s ability to fund the Twitter takeover in “great jeopardy” as he left his shares as collateral for the loans. necessary for the acquisition.

Tesla shares were trading at around $705 apiece as of Thursday afternoon, up from more than $1,000 in early April.

Investors also claimed that Musk’s public criticism of Twitter, including a May 13 tweet claiming the deal to buy was “temporarily on hold” until the company proves that the fake accounts account for less than 5% of its users, amount to an attempt to further drive down the stock price.