Elon Musk: Musk sued by Twitter investors for “manipulation” of shares during a takeover bid

NEW YORK – The billionaire Elon Moss what south? Twitter Inc investors claiming to have manipulated the company’s stock price to the downside, as CEO of the electric carmaker Tesla Inc launches a $ 44 billion takeover bid for the social media platform.

Investors said Musk saved $ 156 million by not disclosing that he bought more than 5% of Twitter by March 14. They asked to be certified as a class and to receive an unspecified amount of punitive and compensatory damages.

They also named Twitter as the defendant, arguing that the company was under an obligation to investigate Musk’s conduct, although they did not seek damages from the company.

Investors said Musk continued to buy stock afterward and eventually revealed in early April that he owns 9.2% of the company, according to the lawsuit, filed in San Francisco federal court Wednesday.

“By delaying the disclosure of his Twitter stake, Musk engaged in market manipulation and bought Twitter stock at an artificially low price,” said investors, led by Virginia resident William Heresniak.

Neither Musk nor his lawyer immediately responded to requests for comment. Twitter declined to comment.

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Investors said Tesla’s recent drop in shares put Musk’s ability to finance his Twitter acquisition in “great danger” as he pledged his stock as collateral to secure the loans he needs to buy the company. .

Tesla stock traded at around $ 713 on Thursday afternoon, down from more than $ 1,000 in early April.

The timing of Musk’s disclosure of his participation has already triggered an investigation by the U.S. Securities and Exchange Commission (SEC), the Wall Street Journal reported earlier this month.

The SEC requires any investor who purchases a stake of more than 5% in a company to disclose their holdings within 10 days of crossing the threshold.

Investors also said that Musk’s public criticism of the company, including a May 13 tweet claiming that the acquisition was “temporarily suspended” until Twitter proved that spam bots accounted for less than 5. % of its users, amounted to an attempt to drive the share price further down.

Musk on Wednesday pledged an additional $ 6.25 billion in equity financing to fund his Twitter offer, 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 terminate the deal on the grounds that some other large Twitter shareholders were backing the acquisition, a violation of the Delaware law. Heresniak’s lawsuit does not seek to stop the takeover.

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