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Twitter shareholder lawsuit accuses Musk of 'market manipulation'

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Agence France-Presse

<div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img alt="A screen shows the logo of Twitter on the floor of the New York Stock Exchange in New York, New York, USA, 16 May 2022. Justin Lane, EPA-EFE/File" src="https://sa.kapamilya.com/absnews/abscbnnews/media/2022/business/05/27/20220527-twitter-new-york-stock-exchange-epa.jpg"/><figcaption>A screen shows the logo of Twitter on the floor of the New York Stock Exchange in New York, New York, USA, 16 May 2022. <em>Justin Lane, EPA-EFE/File</em></figcaption></figure></div><p>SAN FRANCISCO, United States - Elon Musk faces a lawsuit accusing him of pushing down Twitter&#x27;s stock price in order to either give himself an escape hatch from his $44 billion buyout bid, or room to negotiate a discount.</p><p>The suit alleges the billionaire Tesla boss tweeted and made statements intended to create doubt about the deal, which has roiled the social media platform for weeks.</p><p>Filed Wednesday by a shareholder, the claim seeks class action status and calls on a federal court in San Francisco to back the validity of the deal and award shareholders any damages allowed by law.</p><p>Musk said last week that his bid to buy Twitter won&#x27;t proceed unless he gets proof of the number of spam accounts plaguing the platform, adding more uncertainty to his roller-coaster pursuit of the platform.</p><p>Musk&#x27;s tweet that the deal to buy Twitter was &quot;temporarily on hold&quot; defied the fact that there is nothing in the purchase contract allowing that to happen, the suit argued.</p><p>Musk negotiated his Twitter buyout in late April without carrying out due diligence expected in such megadeals, said the suit filed by William Heresniak of Virginia.</p><p>The resulting contract needed only to be approved by Twitter shareholders and regulators, and was to close by October 24 of this year, the suit said.</p><p>Musk was well aware that some Twitter accounts were controlled by software &quot;bots&quot; rather than real people, and had even tweeted about it prior to making his offer to buy the company, the suit argued.</p><p>&quot;Musk proceeded to make statements, send tweets, and engage in conduct designed to create doubt about the deal and drive Twitter&#x27;s stock down substantially,&quot; according to the complaint.</p><p>His aim was to gain leverage to get Twitter at a much cheaper price, or back out of the deal without suffering any penalty, the suit argued.</p><p>&quot;Musk&#x27;s market manipulation worked -- Twitter has lost $8 billion in valuation since the buyout was announced,&quot; stated the claim.</p><p>Twitter shares on Thursday closed slightly up at $39.52, in a sign of investor doubt the buyout will be consummated at the $54.20 per share that Musk originally bid.</p><p>&quot;Musk&#x27;s disregard for securities laws demonstrates how one can flaunt the law and the tax code to build their wealth at the expense of the other Americans,&quot; the court filing said.</p><p>Twitter has said in regulatory filings that it is committed to completing the takeover without delay at the agreed price and terms.</p><p>Musk did not immediately reply to a request for comment sent to Tesla&#x27;s press contact email.</p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/05/26/22/filing-says-elon-musk-to-borrow-less-in-twitter-bid">Filing says Elon Musk to borrow less in Twitter bid</a></li>	<li><a href="https://news.abs-cbn.com/business/04/26/22/twitter-confirms-sale-of-company-to-elon-musk">Twitter confirms sale of company to Elon Musk for $44 billion</a></li>	<li><a href="https://news.abs-cbn.com/business/04/04/22/elon-musk-buys-large-stake-in-twitter-sending-stock-soaring">Elon Musk buys large stake in Twitter, sending stock soaring</a></li></ul><div><strong>RELATED VIDEO:</strong></div><figure class="op-interactive"><iframe allow="autoplay; fullscreen" frameBorder="0" height="100%" id="ivsplayer01" scrolling="no" src="https://player.ivideosmart.com/ivsplayer/v4/dist/html/iframe-src.html?iframeid=ivsplayer01&amp;key=e8c22c015ca9eafa76f1e3edfa03c603&amp;spid=3001339&amp;vid=1927932" width="100%"></iframe></figure><div class="iwantbar">Watch more News on <a href="https://www.iwanttfc.com/#!/browse/Genres/News/tag_id_genres/id_news" target="_blank">iWantTFC</a></div><div> </div>

Elon Musk faces a lawsuit accusing him of pushing down Twitter's stock price in order to either give himself an escape hatch from his $44 billion buyout bid, or room to negotiate a discount.