Twitter shareholders’ lawsuit accuses Elon Musk of ‘market manipulation’
A Twitter shareholder has sued Elon Musk, alleging that the Tesla CEO actively manipulated the company’s stock for personal gain.
“Musk’s conduct was and continues to be illegal, in violation of the California Corporations Code, and contrary to the contractual terms he agreed to in the deal,” the complaint read.
The lawsuit filed late Wednesday in the US District Court for the Northern District of California claims the billionaire Tesla CEO has sought to drive down Twitter’s stock price because he wants to walk away from the deal or negotiate a substantially lower purchase price.
The lawsuit alleged that 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 re-negotiate the buyout price”.
The complaint asked for injunctive relief by the court, which could potentially force Musk to purchase Twitter at the agreed-upon price, the report said.
Musk last month offered to buy Twitter for $44 billion, but later said the deal can’t go forward until the company provides information about how many accounts on the platform are spam or bots.
In a fresh filing with the US Securities and Exchange Commission (SEC), Musk has announced the expiration of a series of margin loans against Tesla stock.
He has now committed to provide an additional $6.25 billion in equity financing for his $44 billion Twitter takeover, bringing his total equity commitment to $33.5 billion.
In response to the plunging value of Tesla’s shares, the Twitter shareholders’ lawsuit claims Musk has been denigrating Twitter, violating both the non-disparagement and non-disclosure clauses of his contract with the company.
[With Inputs from IANS]
PGurus is now on Telegram. Click here to join our channel and stay updated with all the latest news and views
For all the latest updates, download PGurus App.