World

Twitter Investors Sue Elon Musk Over Plunging Share Price

 

A group of investors in Twitter is suing Elon Musk for allegedly forcing down the social media company’s stock price as the billionaire CEO of Tesla reassesses his $44-billion takeover bid.

The lawsuit also named Twitter as a defendant, arguing that the company had an obligation to investigate Musk’s conduct.

The investors said Musk saved himself $156 million by failing to disclose that he had purchased more than 5% of Twitter by March 14.

They sought certification as a class action and to be awarded an unspecified amount of punitive and compensatory damages. The investors are not seeking any damages from Twitter.
 

Also on AF: China May ‘Need to Destroy’ Musk’s Starlink – SCMP

 
The suit alleges Musk continued to buy stock after March 14, before he disclosed in early April that he owned 9.2% of the company.

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

‘Tesla Stock Fall Puts Bid in Peril’

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

The investors said the recent drop in Tesla’s stock has put Musk’s ability to finance his acquisition of Twitter in “major peril” since he has pledged his shares as collateral to secure the loans he needs to buy the company.

Tesla’s shares were trading at around $713 on Thursday afternoon, down from above $1,000 in early April.
 

ALSO SEE: Elon Musk Twitter Feed ‘Attracts 23% Spam, Fake Account Rate’

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

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

The CEO of Tesla 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.

 

  • Reuters, with additional editing by George Russell

 

 

READ MORE:

Tesla Stock Losses Hit 44.6% Since Musk Twitter Saga Began

India Warns Rules Still Apply to an Elon Musk-Owned Twitter

Indonesia’s Jokowi, Tesla’s Musk Hold Talks on Nickel Funding

 

 

George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

Recent Posts

Euphoria in Japan as Nikkei Surges to a Record High

Nikkei share index rose by 2% to an all-time peak on Thursday, thanks to cheap…

31 mins ago

Blacklisted Chinese Surveillance Maker in Saudi Fund Tie-Up

Dahua Technology will manufacture surveillance hardware in Saudi Arabia after signing a deal with a…

15 hours ago

US Targets China’s Top Chip Plant Over Huawei Mate 60 Pro Coup

Experts say that SMIC’s South fab is the only factory with the capability to make…

17 hours ago

SMIC, Huawei Big Winners as China Ramps Up Chip Funding

Local governments in Shanghai and Anhui will fund a variety of semiconductor-related projects this year…

19 hours ago

Generative AI Seen Having Big Impacts on Environment – Nature

Revelations about the amount of power and water needed for computers that power artificial intelligence…

19 hours ago

Russians Named as West Smashes Lockbit Ransomware Gang

US indictment seeks the arrest of two Russian cyber criminals after Britain's National Crime Agency…

21 hours ago