Several Twitter Inc. investors have acted to sue billionaire Elon Musk over allegations that Tesla’s CEO ‘manipulated’ the company’s share price during the fall.
According to the filing, Musk allegedly failed to announce a purchase of more than 5% stake or $ 156 million in Twitter on March 14 last year.
On the other hand, the announcement of the 9.2% stake purchase was only made in early April when the share price was at a low level.
According to the United States Securities and Exchange Commission (SEC) act, any purchase of interest in excess of 5% must be disclosed within 10 days of purchase.
As a result, investors have sought punitive damages as well as unspecified compensation.
In addition, investors also named Twitter as defendants on the grounds that the company failed to investigate Musk's conduct, but did not claim any damages from the firm.
So far, Musk and Twitter have not issued any further statements or comments on the suit by investors.
Meanwhile, there are many more controversies behind Musk's acquisition of Twitter shares, including:
The fall in Tesla shares posed a big problem to Musk’s ability to acquire Twitter as he pledged shares of the electric car (EV) company to secure a loan.
Musk has been criticized for delaying Twitter's purchase on the grounds that bot spam is behind trying to drive further the decline in the company's share price.
Musk was once sued by a Florida pension fund seeking to prevent him from completing the company’s $ 44 billion acquisition before 2025.
