Twitter investors sue Elon Musk for violating corporate law: Elon Musk is being sued by Twitter investors for allegedly violating California corporate law. The business tycoon has been accused of mishandling his $44 billion acquisition of Twitter and misconduct. Investors claim that Musk’s misrepresentation and market manipulation wreaked havoc on the platform’s San Francisco headquarters.
Shares of Twitter have fallen 27% from their $54.20 bid since the offer was announced.
Investors claim Tesla CEO’s tweets on the platform hurt the company and misled its 95 million followers and the public. The tweets in question included Musk announcing that he would shelve the offer, citing fake accounts and bots.
One of the lawyers in the case told BBC that the investors had decided to sue as Musk was continuously disparaging the company he wants to buy for $44bn to renegotiate the purchase price”.
The lawsuit further says that the Tesla boss benefitted financially by delaying the disclosure of his actual stake on Twitter as well as his plans to join the company’s board.
Investors claimed Musk knew about the bots, but his tweets attempted to manipulate the Twitter stock market. The case went on to say that four days later, he doubled down on his accusations that “the Twitter deal cannot continue.”
A lawyer in the case told the BBC that the investors decided to sue because Musk kept devaluing the company he planned to buy for $44 billion to renegotiate the purchase price.
The lawsuit further alleges that the Tesla CEO gained a financial advantage by delaying disclosure of his actual involvement on Twitter and his plans to join the company’s board of directors.