Elon Musk faces a lawsuit accusing him of pushing Twitter’s share price down to either save himself from his $44 billion buyout bid, or to negotiate a discount. be given space for.
The suit alleged that the billionaire Tesla boss tweeted and made statements intended to create doubts about the deal, which rocked the social media platform for weeks.
Filed Wednesday by a shareholder, the claim seeks class action status and calls to a federal court in San Francisco to uphold the legality of the deal and award any damages allowed by law to shareholders.
Musk said last week that his bid to buy Twitter would not proceed until he found evidence of the number of spam accounts on the platform, adding further uncertainty to his roller-coaster search on the platform. .
Musk’s tweet that the deal to buy Twitter was “temporarily on hold” shrugged off the fact that there is nothing in the purchase contract that allows this to happen, the suit argued.
The lawsuit, filed by William Heresniak of Virginia, says Musk negotiated his Twitter buyout in late April without due diligence in such megadeals.
The resulting contract only needed to be approved by Twitter shareholders and regulators, and was to close by October 24 of this year, the suit said.
Musk was well aware that some Twitter accounts were controlled by software “bots” rather than real people, and had even tweeted about it before offering to buy the company, the suit argued.
According to the complaint, “Musk proceeded to make statements, send tweets and engage in conduct designed to raise doubts about the deal and significantly reduce Twitter’s stock.”
Their aim was to get Twitter at a much cheaper cost, or to exit the deal without penalty, the suit argued.
“Musk’s market manipulation worked – Twitter has lost $8 billion in valuation since the purchase was announced,” the claim states.
Twitter shares closed up slightly at $39.52 on Thursday, in a sign of investor doubts that the buyout at $54.20 per share Musk originally bid would consume.
“Musk’s disregard for securities laws demonstrates how someone can flout the law and tax code to build their wealth at the expense of other Americans,” the court filing said.
Twitter said in a regulatory filing that it is committed to completing the acquisition without delay at the agreed price and terms.
Musk did not immediately respond to a request for comment sent to Tesla’s press contact email.