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Twitter Shareholders Sue Elon Musk (Tesla CEO) over ‘Deflated’ Stock Price

Twitter Shareholders have filed a lawsuit against Musk, alleging that his stock price has been artificially inflated.

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➢ Elon Musk is being sued by Twitter shareholders for engaging in “unlawful conduct” in order to cast doubt on his attempt to buy the social media firm.

According to the lawsuit, filed late Wednesday in the United States District Court for the Northern District of California, the billionaire Tesla CEO attempted to drive down Twitter’s stock price in order to walk away from the transaction or negotiate a much cheaper purchase price.

Based in San Francisco The lawsuit also names Twitter as a defendant, and it seeks class-action status as well as financial compensation.

Elon Musk’s spokesperson did not immediately respond to a message-seeking comment on Thursday. Twitter did not respond to requests for comment.\

Musk made a $44 billion offer to buy Twitter last month, but the deal was halted after the firm failed to disclose information on how many accounts on the platform are spam or bots.

Musk, on the other hand, waived due diligence for his “take it or leave it” bid to buy Twitter, according to the lawsuit. That means he gave up his right to inspect the company’s confidential financial records.

Furthermore, the issue of Twitter bots and fraudulent accounts is not new. Last year, the business agreed to pay $809.5 million to settle allegations that it exaggerated its growth rate and monthly user numbers.

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For years, Twitter has disclosed its bot estimates to the Securities and Exchange Commission, while cautioning that the estimate could be too low.

Musk has been selling Tesla stock to help fund the acquisition, and the electric carmaker’s stock has lost about a third of its value since the announcement on April 25.

The Twitter shareholders’ lawsuit says Musk has been disparaging Twitter, in violation of both the non-disparagement and non-disclosure conditions of his contract with the firm, as a result of the company’s stock price plummeting.

“In doing so, Musk hoped to drive down Twitter’s stock price and then use that as a pretext to attempt to re-negotiate the buyout,” according to the lawsuit. Twitter’s shares closed Thursday at $39.54, 27 percent below Musk’s $54.20 offer price.

Before announcing his bid to buy Twitter, Musk disclosed in early April that he had bought a 9 percent stake in the company. But the lawsuit says Musk did not disclose the stake within the timeframe required by the Securities and Exchange Commission.

The Heartz Team. 

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