Musk Sued by Twitter Investors for Stock Manipulation During Takeover Bid
Billionaire Elon Musk was sued by Twitter investors claiming he manipulated the company's stock price downward, as the chief executive of electric carmaker Tesla mounts a $44 billion (roughly Rs. 3,41,552 crore) takeover bid for the social media platform.
The investors said Musk saved himself $156 million (roughly Rs. 1,211 crore) by failing to disclose that he had purchased more than 5 percent of Twitter by March 14. They asked to be certified as a class and to be awarded an unspecified amount of punitive and compensatory damages. [1]
Figure 1. Musk Sued by Twitter Investors for Stock Manipulation During Takeover Bid
Figure 1 shows according to Reuters, they also named Twitter as a defendant, arguing the company had an obligation to investigate Musk’s conduct, though they are not seeking damages from the firm.
The investors said Musk continued to buy stock after that, and ultimately disclosed in early April that he owned 9.2 per cent of the company, according to the lawsuit, filed on Wednesday in San Francisco federal court. [2]
According to investors, many of Musk's tweets in recent days have been "misleading". The complaint included a tweet in which Mr Musk stated his offer for the social media company had been put on hold due to his concerns about the number of bogus accounts on the network.
The tweet on May 13 constituted an attempt to "manipulate the market for Twitter shares" as Musk was aware about the fake accounts, according to the complaint. [3] Musk on Wednesday pledged an additional $6.25 billion in equity financing to fund his bid for Twitter, a sign he is still working to complete the deal.
Musk was sued earlier this month in Delaware Chancery Court by a Florida pension fund seeking to halt the deal on the basis that some other big Twitter shareholders were supporting the buyout, a violation of Delaware law. Heresniak's lawsuit does not seek to stop the takeover. [4]
With a previous round of stock financing, Musk slashed that number in half, and he has now reworked the deal to eliminate them completely. [3]
References:
- https://gadgets360.com/social-networking/news/elon-musk-sued-twitter-investors-over-stock-manipulation-during-takeover-bid-3013599
- https://www.thisdaylive.com/index.php/2022/05/27/twitter-investors-sue-elon-musk-for-stock-manipulation-during-takeover-bid/
- https://www.computing.co.uk/news/4050449/twitter-investors-sue-elon-musk-stock-manipulation-takeover-bid
- https://www.computing.co.uk/news/4050449/twitter-investors-sue-elon-musk-stock-manipulation-takeover-bid
Cite this article:
Thanusri swetha J (2022), Musk Sued by Twitter Investors for Stock Manipulation During Takeover Bid, Anatechmaz, pp. 343