Elon Musk is facing a lawsuit alleging that he pushed Twitter’s stock price to protect himself from his 44 44 billion buyout bid, or to make room for a discount.
The lawsuit alleges that billionaire Tesla Boss tweeted and made statements intended to cast doubt on the deal, which has been misleading social media platforms for weeks.
Filed by a shareholder on Wednesday, the claim seeks class action status and urges a federal court in San Francisco to uphold the validity of the agreement and to pay the shareholders any compensation approved by law.
Musk said last week that his bid to buy Twitter would not go ahead until he found evidence of the number of spam accounts plaguing the platform, adding to the uncertainty surrounding his roller-coaster pursuit of the platform.
Musk’s tweet denied the fact that the Twitter purchase agreement was “temporarily on hold” and argued that there was nothing in the purchase agreement that allowed it to happen.
The lawsuit, filed by William Herseniak of Virginia, alleges that Musk discussed buying his Twitter account in late April without the expected due diligence.
As a result, the deal only needs to be approved by Twitter shareholders and regulators and will close by October 24 this year, the lawsuit said.
Musk was well aware that some Twitter accounts were controlled by software “bots” rather than real people and even tweeted about it before the company offered to buy, the lawsuit argued.
The indictment states that “Mask was involved in making statements, sending tweets and raising suspicions about the deal and in a deliberate attempt to significantly reduce Twitter’s stock.”
His motive was to gain leverage to get Twitter at a much lower price, or to withdraw from the contract without any penalty, the lawsuit argued.
“Mask market manipulation has worked – Twitter has lost 8 billion since the announcement of the purchase,” the claim said.
Shares of Twitter rose slightly to $ 39.52 on Thursday, a sign of investor skepticism that the buyout would be completed at $ 54.20 per share that Musk originally bid.
“The mask’s disregard for securities law demonstrates how one can flout laws and tax codes to create their assets at the expense of other Americans,” the court filing said.
The Twitter regulator said in the filing that it was committed to completing the takeover without delay at agreed prices and terms.
Musk did not immediately respond to a request for comment sent in a Tesla press contact email.
(Except for the title, this story was not edited by NDTV staff and was published from a syndicated feed.)