Elon Musk Sued by Twitter Investors for Delayed Disclosure
Godfrey Benjamin May 27, 2022 02:40
A group of investors sued Elon Musk to save himself about $156 million for failing to disclose that he had purchased more than 5% of Twitter shares by March 14.
Twitter investors are out for Elon Musk, the Chief Executive Officer of electric auto manufacturer Tesla Inc for causing them some punitive damages.
According to The Guardian and multiple sources, the group of investors said Elon Musk saved himself about $156 million for failing to disclose that he had purchased more than 5% of Twitter shares by March 14.
The investors said Musk continued to acquire the social media giant’s shares and, by so doing, profited from a relatively low price before finally announcing the acquisitions in early April.
The investors are led by Virginia resident William Heresniak who noted that “By delaying his disclosure of his stake in Twitter, Musk engaged in market manipulation and bought the Twitter stock at an artificially low price.”
The lawsuit was filed in San Francisco, and William and his fellow investors wish for the case to be classified as a Class Action. They are demanding an undisclosed amount of money in compensation for all punitive and compensatory damages.
The Elon Musk acquisition of Twitter is currently being dragged on for a long as the billionaire said he wants the company to provide proof that spambots do not exceed 5% of the social media’s total user base. In the lawsuit filing, the investors said the company’s proposed acquisition is currently under “major peril” since the Tesla shares that Musk pledged as collateral to acquire the firm has slumped from $1,000 when the deal was unveiled to $709 at the time of writing.
Musk, however, is still very committed to the acquisition as he reportedly secured a new $6.25 billion equity funding earlier this week. This complements the growing contributions from Venture Capital firms, including Sequoia Capital and Binance and aligns with Musk’s commitment to championing freedom of speech on the social media platform.
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