Twitter investors sue Elon Musk — Analysis
A lawsuit alleges that the SpaceX billionaire manipulated the social media platform’s stock price to try and secure a better deal
Twitter investors sued both Elon Musk and Twitter itself in a California court on Wednesday, arguing that the SpaceX and Tesla billionaire drove the social media company’s price down before initiating a buyout, and then publicly disparaged Twitter in a bid to renegotiate the terms of the purchase.
William Heresniak was the investor who brought the class action suit. “on behalf of himself and all others similarly situated,”This would be small investors such as Herseniak, all the way to large financial institutions like Vanguard Group or BlackRock which together own 15% of the social networking platform.
The suit alleges that Musk delayed disclosing the fact that he had bought a stake in Twitter in March, that he planned on purchasing the company, and that he intended to join the platform’s board of directors, actions that Herseniak’s lawyers argue “would have caused Twitter’s stock to increase.”
Musk’s $44 billion purchaseout was initiated by Musk. The suit claims that Musk spread false information regarding the deal. “temporarily on hold” in order to drive down Twitter’s stock price and negotiate a better deal. Musk is a frequent Twitter user who claims that fake accounts and spam accounts make Twitter less valuable. However, the suit alleges Musk knew all this information due to a settlement in 2021 to a fraud lawsuit alleging. “Twitter overstated its user numbers and growth rate.”
Twitter’s share price fell by 19% on May 13 after Musk tweeted, “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.”
“Musk then continued issuing false and disparaging tweets about Twitter in an effort to drive its stock price down further,”It continued. “Musk’s wrongful conduct has not only substantially harmed Twitter’s shareholders by causing Twitter’s stock to crater by approximately 25%, but it has also substantially harmed Twitter’s employees,”The report continued by citing media reports that Twitter executives are worried for their futures, amid rumors Musk’s plans to reduce his staff.
Finally, the suit is closed with an unanticipated claim by Musk last week. He claimed that he would “vote Republican,”In a bid for “further excite the media of his conduct.”
Bill Gates paid millions to derail Elon Musk’s plans – media
Herseniak also wants his legal fees “punitive damages at the maximum amount permitted by law,”Which suit? “exceeds the sum or value of $5,000,000.”
In addition to placing him in the crosshairs of angered investors, Musk’s takeover bid has infuriated censorship advocates, who have taken issue with his stated goal of removing Twitter’s speech restrictions. Musk describes himself as “a genius” “free speech absolutist,” has been condemned by liberal NGOs and threatened with an advertiser boycott funded by billionaire financier George Soros and – reportedly – Bill Gates, a proponent of wider control over the spread of information on social media.
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