Saturday, June 15, 2024
26 C
Brunei Town

Musk sued for stock ‘manipulation’ during takeover bid

CNA – Billionaire Elon Musk was sued by Twitter Inc investors claiming he manipulated the company’s stock price downward, as the chief executive of electric carmaker Tesla Inc mounts a USD44 billion takeover bid for the social media platform.

The investors said Musk saved himself USD156 million by failing to disclose that he had purchased more than five per cent of Twitter by March 14. They asked to be certified as a class and to be awarded an unspecified amount of punitive and compensatory damages.

They also named Twitter as a defendant, arguing the company had an obligation to investigate Musk’s conduct, though they are not seeking damages from the firm.

The investors said Musk continued to buy stock after that, and ultimately disclosed in early April that he owned 9.2 per cent of the company, according to the lawsuit, filed on Wednesday in San Francisco federal court.

“By delaying his disclosure of his stake in Twitter, Musk engaged in market manipulation and bought Twitter stock at an artificially low price,” said the investors, led by Virginia resident William Heresniak.

Neither Musk nor his lawyer immediately responded to requests for comment. Twitter declined to comment.

The investors said the recent drop in Tesla’s stock has put Musk’s ability to finance his acquisition of Twitter in “major peril” since he has pledged his shares as collateral to secure the loans he needs to buy the company.

Tesla’s shares were trading at around USD713 on Thursday afternoon, down from above USD1,000 in early April.

The timing of Musk’s disclosure of his stake has already triggered an investigation by the US Securities and Exchange Commission (SEC), the Wall Street Journal reported earlier this month.

spot_img

Latest

spot_img