Investors say Elon Musk saved $156 million by not disclosing that he had bought more than 5% of Twitter before March 14.
Eccentric billionaire Elon Musk has been sued by Twitter investors alleging he manipulated the company’s share price lower as Tesla ‘s owner racks up a $44 billion takeover offer for the social media platform.
Investors said Musk saved $156 million by not disclosing that he had bought more than 5% of Twitter before March 14. The plaintiffs request to be certified and receive an unspecified amount of punitive and compensatory damages.
They also sued Twitter , arguing that the company had an obligation to investigate Musk’s conduct, although they are not seeking damages from the social network .
Elon Musk and Twitter
Investors said Musk continued to buy shares after his takeover offer, eventually revealing in early April that he owned 9.2% of the company, according to the lawsuit filed in federal court in San Francisco, according to The Guardian .
The US Securities and Exchange Commission requires any investor who buys more than a 5% stake in a company to disclose their holdings within 10 days of crossing the threshold.
“By delaying the disclosure of his Twitter holding, Musk engaged in market manipulation and bought Twitter shares at an artificially low price,” the investors, led by William Heresniak, said.
In addition, investors said the recent slide in Tesla shares has put Musk ‘s ability to finance his Twitter acquisition in “great jeopardy” as he has pledged his shares of the electric vehicle company as collateral to secure the loans. you need to buy Twitter.
Shares of Tesla were trading at around $713 on Thursday afternoon, down from $1,000 in early April.