Elon Musk is being sued by Twitter shareholders for allegedly manipulating the market during his attempted takeover of the social media giant.
On April 14, Elon Musk, the CEO of Tesla, Space X, and the founder of the Boring Company and Neuralink, made a €41 billion ($44 billion) offer to buy Twitter and become its CEO.
Musk is now being accused by Twitter shareholders of manipulating the market in order to save about €145 million ($155 million) on the sale.
Musk has yet to react to a request for comment on the matter.
Musk allegedly delayed informing the market that he had purchased a stake in Twitter beyond a legal threshold, according to the shareholders.
“Musk manipulated the market and bought shares at an artificially low price by delaying the release of the magnitude of his position in Twitter,” the investors’ lawyers, led by William Heresniak, argue.
Musk’s actions leading up to his attempted acquisition of Twitter have sent the company’s stock price soaring and tumbling, frequently based only on the content of one of his tweets.
When Musk disclosed on April 4 that he had purchased 9.2 percent of Twitter’s stock, the stock soared by as much as 27 percent, it’s the highest level since the company became public.
Following that, Musk was invited to join Twitter’s board of directors. He would not have been able to buy more than 14.9% of the business’s shares if he had joined, and he would not have been able to openly criticize the corporation as freely.
Musk tweeted that instead of joining the board, he planned to make a private offer to buy Twitter altogether.
He made his €41 billion ($44 billion) offer at that time. The board of directors initially opposed it, but later agreed to it.
According to the lawsuit, “Musk made speeches, posted tweets, and took other acts designed to cast doubt and materially decrease Twitter’s stock in order to generate leeway he hoped to utilize to walk away from the contract or renegotiate the price.”
Musk has raised some of the funds for the purchase with loans backed by stock in his business Tesla, according to the lawyers.
Since the offer, Tesla’s stock has plummeted in value. Tesla was trading at roughly $700 yesterday, down from above $1,000 in early April.
- CBI Arrests ABIL Group Chairman Avinash Bhosale in Yes Bank-DHFL Scam Case
- ‘How to Murder Your Husband’ author found guilty of murdering husband
The world’s richest man, on the other hand, has boosted his and his business partners’ contributions to the sale to about €31 billion, reducing his need on banks.
Following his announcement, Twitter’s stock price rose by 5% that evening.
Musk has defended his takeover of Twitter in the past, alleging that critics are driven by politics.
Musk has stated that once he takes control of Twitter, he will delist it from the stock exchange.