multimillionaire Elon Musk was sued by Twitter Inc investors for late disclosure of his stake in the company as the owner of electric carmaker Tesla Inc mounts a $44 billion takeover bid 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. He continued to buy shares after that, eventually revealing in early April that he owned 9.2% of the company, according to the lawsuit, filed Wednesday in San Francisco federal court. “By delaying the disclosure of his Twitter holding, Musk engaged in market manipulation and bought Twitter stock at an artificially low price,” said the investors, led by Virginia resident William Heresniak.
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Premium Neither Musk nor his attorney immediately responded to requests for comment. Twitter declined to comment. 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 as collateral to secure the loans he needs to buy. the company. Shares of Tesla were trading around $700 on Thursday, down from $1,000 in early April. The timing of Musk’s disclosure of his involvement has already triggered an investigation by the US Securities and Exchange Commission (SEC), the Wall Street Journal reported earlier this month.Buy now | Our best subscription plan now has a special priceMusk pledged an additional $6.25 billion in equity financing on Wednesday to fund his Twitter bid, a sign he is working to complete the deal even though he last week conditioned his progress on Twitter by presenting evidence that spam bots accounted for less than 5% of its users. In Wednesday’s lawsuit, the investors asked to be certified as a class and receive an unspecified amount of punitive and compensatory damages.
