Twitter shareholders are suing Twitter and Elon Musk over the late disclosure of several facts relating to the acquisition, as well as Musk’s tweets presenting false statements and manipulating the stock market.
In a class action lawsuit filed by shareholder William Heresniak on Wednesday in the Northern District of California, the complaint claims Musk and Twitter are violating California corporations code in the ongoing acquisition expected to close later this year. This adds to another shareholder’s lawsuit filed in April over Musk’s late disclosure of his stake in Twitter. Musk, CEO of Tesla and SpaceX, has a pending deal to buy the social media company for $44 billion but recently said the acquisition was on hold.
The complaint alleges that Musk failed to disclose on time his approximately 9% stake in Twitter, his invitation to join the company’s board and his intention to acquire Twitter. Shareholders also claim that Musk’s tweets throughout May are false statements and engage in market manipulation of Twitter’s stock in order to drive the purchase price down.
“Musk quickly acted to attempt to mitigate these personal risks to himself by engaging in unlawful conduct that moved the price of Twitter’s stock down,” the complaint noted. “Musk proceeded to make statements, send tweets, and engage in conduct designed to create doubt about the deal and drive Twitter’s stock down substantially in order to create leverage that Musk hoped to use to either back out of the...
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