- Annabelle Liang
- BBC economics correspondent
6 hours ago
A Twitter investor is suing billionaire Elon Musk as well as the social media platform over handling of Musk’s $44 billion bid for the company.
The lawsuit alleged that he violated California’s trade laws in more ways than one.
The lawsuit also accuses the Tesla chief of “acting illegally” and that “his release of false statements and market manipulation created chaos at Twitter’s San Francisco headquarters.”
The value of Twitter shares is regarding 27 percent less than the value that Musk offered per share, which amounted to $ 54.20.
The class action was filed this week in the US District Court for the Northern District of California by investor William Hirsniak, who said he was acting “on behalf of himself and all other persons in the same situation”.
The lawsuit alleged that Musk benefited financially from the delay in disclosing his large stake in Twitter, and his plan to become a member of the company’s board of directors.
It also claimed that many of the tweets posted by Musk, a regular Twitter user with more than 95 million followers, were “misleading”.
It included a tweet by Musk in which Musk said his bid to acquire the social media company was on hold due to his suspicions regarding the number of fake accounts on the platform.
The lawsuit said his May 13th tweet “constituted an attempt to manipulate the market to influence Twitter’s stock because he learned of the fake accounts.”
It also said that Musk “doubled up” his claims four days later, saying on Twitter that the deal “mightn’t go ahead.”
On Friday, Frank Bottini, one of the lawyers representing the Twitter investors, told the BBC that the lawsuit was filed because Musk “continues to discredit the company he wants to buy for $44 billion in an attempt to renegotiate the purchase price”.
“The complaint we filed in San Francisco seeks to hold Musk responsible for his unlawful behavior,” Bottini said.
Lawyers for Musk and Tesla did not immediately respond to the BBC’s request for comment, and Twitter declined to comment when contacted by the BBC.
Analysts have speculated that Musk may have been looking for ways to lower his takeover bid or walk away from the deal.
He has tweeted several times that he is concerned regarding the number of fake accounts, or bots, on Twitter.
A bot is a program that sends automated posts and is often associated with spreading misinformation on social media platforms.
Musk has also hinted that he may seek to pay less than the $44 billion agreed with the company’s board of directors in March.
Speaking at a tech conference earlier this month, he said a lower-price deal was “not out of the question”.
Earlier this month, a Florida pension fund also challenged Musk’s move to buy Twitter as he claimed a deal might not be struck in months as planned.
The Orlando Police Retirement Fund said Musk was an “interested shareholder” in Twitter, having struck deals with major shareholders, including co-founder Jack Dorsey, before he offered to buy the company.
According to a law in the US state of Delaware, where Twitter was founded, “the deal should not be allowed to close before 2025.”
The fund did not disclose its stake in the social media platform, although it said it had been a ” beneficial owner of Twitter’s common stock” at “all relevant times”.
