Twitter shareholders sue Elon Musk for stock market manipulation

Twitter shareholders are suing Elon Muskaccusing him of allegedly manipulating the market in his bid to take over the social media platform.

the executive director of TeslaSpace X and the founder of the Boring Company and Neuralink made a €41 billion ($44 billion) offer to buy Twitter and become the company’s CEO on April 14.

Twitter shareholders now accuse Musk of manipulating the market to save around 145 million euros ($155 million) on the sale.

Musk has not responded to a request for comment on the case.

Shareholders say Musk was allegedly slow to tell the market that he had acquired a stake in Twitter beyond the legal threshold.

“By delaying the publication of his holding amount on Twitter, Musk manipulated the market and bought shares at an artificially low price,” say the investors’ lawyers, led by William Heresniak.

Musk’s actions in the build-up to his attempted takeover of Twitter have sent the company’s stock price skyrocketing, often just because of the content of one of his tweets.

When Musk announced that he had bought 9.2 percent of Twitter stock on April 4, Twitter’s stock surged the most since the company went public, rising as much as 27 percent.

After that, Twitter invited Musk to join the board. Had he joined, he would have been barred from buying more than 14.9 percent of the company’s shares and would not have been able to publicly criticize the company with the same freedom.

Instead of joining the board, Musk tweeted that he planned to make a private offer to buy Twitter outright.

That’s when he made his offer of 41 billion euros ($44 billion). Originally the board of directors opposed it, but later they accepted it.

“Musk made statements, tweeted, and took other actions designed to cast doubt and substantially depress Twitter’s stock to create leeway that he hoped to use to walk away from the deal or renegotiate the price,” the suit says.

Lawyers have pointed out that Musk has raised part of the financing for the purchase with loans backed by shares of his company Tesla.

Tesla has lost value since the offering. Yesterday, Tesla was trading at around $700 from over $1,000 in early April.

However, the world’s richest man has increased the amount he and his business partners put into the sale to around €31bn, reducing the amount reliant on banks.

Twitter’s stock price rallied 5 percent that night after I announced this.

Musk has previously defended his takeover of Twitter, claiming the criticism is politically motivated.

Musk has claimed that once he owns Twitter, he will delist it from the stock market.

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