A lawsuit got filed against Elon Musk in relation to his proposed takeover of Twitter. Tesla’s CEO got sued by investors who claim he manipulated stock prices. This was in the run-up to his forty four billion dollars takeover offer. Musk allegedly saved one hundred and fifty six million dollars. He did so by not declaring that he had purchased more than a 5% position in Twitter. This was in March 14, which violated SEC guidelines, as was the case in a previous lawsuit. Musk only acknowledged his ownership in the social network in early April. In it he said that he had only a ten percent stake.
Investors argued that Musk’s post-announcement utterances were likewise manipulative. The agreement got halted because Twitter couldn’t realize that bots were a huge issue. Twitter said they represented fewer than 5% of accounts. They were especially worried about this allegation.
Class action status is being sought by the plaintiffs in this lawsuit. They are looking to file cases against unspecified damages, if they are successful. Tesla CEO Elon Musk has not yet replied to requests for comment from the news agency Reuters.
There has already been a flurry of legal action in response to Musk’s acquisition. A pension fund from Florida has sued Musk for allegedly breaking a Delaware statute. It would keep the merger from happening until 2025, as it got reported in the previous days. Meanwhile, the SEC is looking into Musk’s timing of the announcement. There is no guarantee that any of these initiatives will be successful. But Musk’s goals are still challenged in a serious manner. We still cannot predict what turn this acquisition take in the next few months.Also, it is hard to tell whether Musk will be successful in his endeavor.
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