CRIMINAL CAPITALI$M
Elon Musk sued by Twitter shareholder, alleging that he manipulated the company's stock price with his tweets following the buyout agreement
A Twitter investor is suing Elon Musk for market manipulation for his tweets about the buy being "on hold."
The complaint was filed in California on Wednesday.
"Just because your name is Business Insider Trading doesn't mean you should project that on others!" Musk told Insider in an email.
A Twitter shareholder is suing Elon Musk and Twitter over Musk's tweets following his agreement to buy the company last month.
The proposed class-action suit, filed in a federal district court in San Francisco on Wednesday, alleges that Musk manipulated the value of the social media company via his tweets, which hurt investors and employees.
The suit focuses mainly on Musk's tweet earlier this month that the deal was "on hold" until he could be sure that Twitter's reported figure that fewer than 5% of the the platform's accounts comprised spam bots is accurate.
"Musk's tweet (and public statement) was misleading and constituted an effort to manipulate the market for Twitter shares as he knew all about the fake accounts," the complaint says.
The complaint argues that Musk used tweets about spam bots to lower Twitter's stock price so he could renegotiate the price of the deal.
"Musk's market manipulation worked -- Twitter has lost $8 billion in valuation since the buyout was announced," the complaint says.
Twitter shares have fallen more than 19% to below $40 from where they traded the day before Musk announced a deal to take the company private in a buyout worth $54.20 a share.
Twitter didn't immediately respond for comment, but via email Musk replied:
"Just because your name is Business Insider Trading doesn't mean you should project that on others!"
The complaint further argues that Musk made his tweets and public comments to help ease the pressure from a planned loan backed by his Tesla equity that was originally meant to add to financing the Twitter deal, which he dropped this week, the WSJ reported.
Tyson Redenbarger, partner at Cotchett, Pitre & McCarthy, one of the plaintiff's lawyers on the case, described the complaint as "as simple as it sounds." The California statute the complaint cited prohibits market manipulation, and "what we allege in the complaint is it's clear this is exactly what has happened," he added.
Elon Musk sued by Twitter investors for delaying disclosure of stake
Investors say Musk saved himself $156m by failing to disclose that he had purchased more than 5% of Twitter by 14 March
Investors say Musk saved himself $156m by failing to disclose that he had purchased more than 5% of Twitter by 14 March
‘By delaying his disclosure of his stake in Twitter, Musk engaged in market manipulation and bought Twitter stock at an artificially low price.’
Reuters
Thu 26 May 2022
Elon Musk was sued by Twitter investors for delaying the disclosure of his stake in the company, as the Tesla owner mounts a $44bn takeover bid for the social media platform.
The investors said Musk saved himself $156m by failing to disclose that he had purchased more than 5% of Twitter by 14 March.
Musk continued to buy stock after that, and ultimately disclosed in early April that he owned 9.2% 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 around $700 on Thursday, down from above $1,000 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.
Musk on Wednesday pledged an additional $6.25bn in equity financing to fund his bid for Twitter, a sign he is working to complete the deal even though he last week conditioned its progress on Twitter presenting proof that spam bots accounted for less than 5% of its users.
In Wednesday’s suit, the investors asked to be certified as a class and to be awarded an unspecified amount of punitive and compensatory damages.
Reuters
Thu 26 May 2022
Elon Musk was sued by Twitter investors for delaying the disclosure of his stake in the company, as the Tesla owner mounts a $44bn takeover bid for the social media platform.
The investors said Musk saved himself $156m by failing to disclose that he had purchased more than 5% of Twitter by 14 March.
Musk continued to buy stock after that, and ultimately disclosed in early April that he owned 9.2% 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 around $700 on Thursday, down from above $1,000 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.
Musk on Wednesday pledged an additional $6.25bn in equity financing to fund his bid for Twitter, a sign he is working to complete the deal even though he last week conditioned its progress on Twitter presenting proof that spam bots accounted for less than 5% of its users.
In Wednesday’s suit, the investors asked to be certified as a class and to be awarded an unspecified amount of punitive and compensatory damages.
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