Elon Musk does not seem to have followed the rules when it came to taking over Twitter: A shareholder accuses the entrepreneur of having neglected his duties and deliberately damaging the Twitter share price. The man is still alone with his allegations - but he is hoping for fellow plaintiffs soon.
Elon Musk's handling of the proposed acquisition of Twitter has sparked a shareholder lawsuit against him and the company. A US shareholder accuses the tech billionaire, among other things, of having saved a lot of money at the expense of shareholders by violating information obligations when buying Twitter shares.
He also accuses him of having sent the price of Twitter shares plummeting with his comments after the deal was closed. The Virginia shareholder is seeking class action status, according to the complaint filed Wednesday. Musk has yet to comment on the lawsuit.
Musk had already bought a good nine percent stake in the online service before the announcement of his takeover plan for Twitter. According to US rules, exceeding the five percent mark must be made public within ten days - Musk, however, exceeded this deadline by eleven days. This announcement triggered a surge in the share price. Based on the price difference, the suing shareholder now accuses Musk of having saved $156 million through the late notification. According to media reports, US authorities are also examining Musk's approach.
After Musk agreed with Twitter's board of directors on an acquisition at a price of $54.20 per share, his comments caused turbulence around the deal. He declared the deal suspended because he suspected that the proportion of spam and bot accounts was above the estimates of less than five percent often quoted by Twitter. He wanted to see evidence from Twitter first.
Twitter stock was trading at just $39 in premarket trading this Friday, a far cry from Musk's offer. The plaintiff shareholder accuses Musk of deliberately causing the price decline. From Twitter's point of view, however, the tech billionaire cannot unilaterally put the agreement on hold and the board of directors is determined to complete the deal for the agreed $54.20 per share. A shareholder vote on whether to accept Musk's offer is still pending.