Twitter investors sue Elon Musk for alleged Stock Price Manipulation during Takeover Bid

Elon Musk is being sued by Twitter shareholders, who accuse him of acting illegally regarding his takeover bid of the social media platform.

They claimed that the 50-year-old Tesla billionaire has attempted to bring down the platform’s stock price, by means of posting tweets concerning the number of bots or fake accounts on Twitter. They believe he did this because he wants to either walk away from the deal or negotiate a much lower price.

On April 25, Twitter announced the deal to sell to Musk, stating he would make the company private by paying $54.20 per share in cash after a whirlwind courtship between him and the social media platform. The company said it expects to complete the transaction sometime this 2022.

However, on May 13, Musk took to his Twitter account and wrote:

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users… Still committed to acquisition”

Musk said he thinks he should pay less, if over 5% of accounts turn out to be fake.

This sent Twitter stock plummeting as much as 25% in premarket trading. A few hours went by and he posted another tweet saying he is “still committed” to the deal. Twitter shares then were able to recoup some of the losses but were down about 10%.

The lawsuit was filed Wednesday in federal district court for Northern California and accuses Musk intentionally drove down the company’s stock to get a better deal. The complaint states, “The fair market value of Twitter securities has been adversely affected by Musk’s false statements and wrongful conduct.”

One of the lawyers representing the Twitter investors Frank Bottini said on Friday that the lawsuit was filed as Elon Musk “continues to disparage the company he wants to buy for $44bn in an effort to renegotiate the purchase price. The complaint we filed in San Francisco seeks to hold Musk liable for his unlawful conduct.”

Image: U.S. News

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