Twitter shareholders sue Elon Musk, claiming his jokes have devalued stock prices | CBC News:

Twitter shareholders have filed a lawsuit accusing Elon Musk of “illegal behavior” aimed at raising suspicions about his offer to buy the social media company.

A lawsuit filed in the California District Court late Wednesday night alleges that the billionaire CEO of Tesla tried to reduce the price of shares of Twitter because he wanted to cancel the deal or negotiate a significantly lower purchase price.

San Francisco-based Twitter is also cited as a response to a lawsuit that requires status of group action as well as damages.

Musk’s spokesman did not immediately respond to a request for comment. Twitter declined to comment.

The “take it or leave it” offer

Musk offered to buy Twitter for $ 44 billion last month, but later said the deal could not continue until the company provided information on how many spam or bot accounts on the platform.

The lawsuit alleges that Musk refused due diligence in his offer to buy or leave Twitter. This means that he has waived his right to look at the company’s non-state finances.

WATCH |: “Twitter deal is ‘temporarily suspended,'” Musk said.

Elon Musk announces $ 44 billion Twitter deal ‘temporarily suspended’

Elon Musk says the US $ 44 billion purchase of Twitter has been “temporarily suspended” pending details of spam accounts on social media, but he is “still committed to the acquisition.”

Besides, the problem of bots and fake accounts on Twitter is not new. Last year, the company paid $ 809.5 million to meet its growing demand for օգտագործ monthly user numbers. For years, Twitter has been exposing its bots to the Securities and Exchange Commission, while warning that its rating could be too low.

Musk was selling shares of Tesla to finance some of the acquisition, and shares of the electric car maker lost almost a third of their value after the deal was announced on April 25.

In response to a drop in Tesla shares, a lawsuit filed by Twitter shareholders alleges that Musk was downgrading Twitter, violating the terms of “disrespect” or non-disclosure of his contract with the company.

“By doing so, Musk hoped to reduce the price of Twitter shares – to use it as an excuse to try to renegotiate the purchase,” the lawsuit states.

Shares of Twitter closed at $ 39.54 on Thursday, down 27 percent from Musk’s offer of $ 54.20.

High quality saga

Before announcing his bid to buy Twitter, Musk revealed in early April that he had bought a 9% stake in the company. However, the lawsuit alleges that Musk did not disclose the shares within the timeframe required by the Securities and Exchange Commission.

The lawsuit alleges that the SEC’s final disclosure of its shares was “misleading” because it used a “passive investor” horse, which Musk did not do at the time, as he was offered a position on Twitter և was interested in buying the company.

Musk won more than $ 156 million for failing to disclose his increased shares in a timely manner, as Twitter’s share price could have been higher if investors had known Musk was raising his stake, the lawsuit said.

“Delaying the disclosure of his shares on Twitter, Musk became involved in market manipulation, artificially buying Twitter shares at a low price,” the lawsuit states.


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