San Francisco Elon Musk’s approach to the proposed acquisition of Twitter has sparked a shareholder lawsuit against him and the company. Among other things, a US shareholder accuses the tech billionaire of having saved a lot of money at the expense of shareholders by violating information obligations when buying up Twitter shares.
He also accuses him of sending the price of Twitter shares plummeting with his comments after the deal was completed. The Virginia-based shareholder is seeking class-action status, according to the statement of claim filed Wednesday. Musk has not commented on the lawsuit so far.
Musk had already bought a share of a good nine percent in the online service before announcing his takeover plan for Twitter. According to US rules, it is mandatory to make the crossing of the five percent mark public within ten days – but Musk exceeded this deadline by eleven days.
This announcement triggered an increase in the share price. Based on the difference in price, the plaintiff shareholder now accuses Musk of having saved $ 156 million by the late notification. According to media reports, US authorities are also examining Musk’s approach.
After Musk agreed with the Twitter board of Directors on a takeover at a price of $ 54.20 per share, his comments triggered turbulence around the deal. For example, he declared the deal suspended because he suspected that the proportion of spam and bot accounts was above the estimates of less than five percent often mentioned by Twitter.
He wanted to see evidence from Twitter first. Twitter’s stock was trading at just $39 in premarket trading on Friday, a far cry from Musk’s offer. The complaining shareholder accuses Musk of deliberately causing the share price decline.
However, from Twitter’s point of view, the tech billionaire cannot unilaterally put the agreement on hold, and the Board of Directors is determined to settle the deal for the agreed $ 54.20 per share. A shareholder vote on whether to accept Musk’s offer is still pending.