What you need to know
- Twitter shareholders are suing prospective new owner Elon Musk.
- It's alleged that Musk has been trying to get a better deal by driving down the price of Twitter shares.
- Musk is also accused of improper actions over his disclosure of a greater than 5% share in the company, again to buy shares at a lower price.
Twitter investors are now suing the company's potential new owner, Elon Musk, over moves he has made in an attempt to try and drive down the price of their shares. Musk's buyout of the company is trundling along despite him previously saying that it was "temporarily on hold."
That message, posted to Twitter, is part of the problem. A new lawsuit claims that Musk has been trying to manipulate Twitter's share price in an attempt to get a better deal than the $44 billion he'd already offered. Musk claimed that Twitter had misreported the number of spam accounts on its platform, putting the deal on hold. TechCrunch reports that shareholders believe that was little more than an attempt to get a better deal. Despite Musk's claim that the deal was paused, there were no legal papers to say that was the case.
The suit was filed Wednesday in federal district court for Northern California and argues that Musk intentionally drove down the company's stock to secure a better deal. "The fair market value of Twitter securities has been adversely affected by Musk's false statements and wrongful conduct," the complaint states.
Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuynTwitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn— Elon Musk (@elonmusk) May 13, 2022May 13, 2022
That isn't the only accusation flying around. The same suit claims that Musk deliberately delayed saying that he had bought more than 5% of the company's shares until he had bought more, allowing him to pick them up at a song. Once the news was public, the share price skyrocketed.
The takeover of Twitter by the Tesla and SpaceX CEO has already proven to be one full of twists, turns, and tweets and that seems likely to remain the way right through to completion. Assuming that actually happens, of course.
