Elon Musk and his ongoing Twitter saga continue to dominate the headlines, and today is no different. A proposed class-action lawsuit filed on Wednesday claims that Musk violated California corporate laws. The shareholders allege Musk has manipulated the stock and that he failed to disclose his Twitter stake in a timely manner.
One potential infraction on the park of Musk is based on his delayed disclosure about his purchases of Twitter stock. The shareholder lawsuit also claims Musk acted on insider information about the company obtained from private conversations with board members and executives, including Twitter Co-founder Jack Dorsey ad Silver Lake co-CEO Egon Durban. Shareholders voted to not reinstate Durban on Wednesday and Dorsey also resigned from Twitter's board this week.
(Of Twitter)— Elon Musk (@elonmusk) May 26, 2022
Musk did tweet about Jack's resignation from Twitter's board of directors, but also added that "I'm a fan of Jack btw. Wish he would stay on the board, but I understand that he needs to move on."
"By delaying his disclosure of his stake in Twitter, Musk engaged in market manipulation and bought Twitter stock at an artificially low price," said the investor group.
“Musk proceeded to make statements, send tweets, and engage in conduct designed to create doubt about the deal and drive Twitter’s stock down substantially in order to create leverage that Musk hoped to use to either back out of the purchase or to re-negotiate the buyout price by as much as 25% which, if accomplished, would result in an $11 billion reduction in the Buyout consideration,” the complaint said.
The case, Heresniak v. Musk et al, was filed in a California Northern District Court on Wednesday and shareholders are seeking a jury trial. Musk just announced yesterday that he no longer plans on levering his TSLA stake to finance the purchase, committing another $6.25 billion to the Twitter deal. Shares of both Tesla and Twitter were up today on that news, but who knows where things are heading as this clown show continues. One thing
This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.
At the time of this article, Shacknews primary shareholder Asif A. Khan, his family members, or his company Virtue LLC had the following positions:
Long Twitter via TWTR shares
Long Tesla via TSLA shares
Asif Khan posted a new article, Elon Musk sued by Twitter (TWTR) investors over stock manipulation & timing of SEC filing
Jack: Whoops, Elon is toxic.