(ORDO NEWS) — Elon Musk is in trouble. Investors have formed a class-action lawsuit against the billionaire over his handling of the Twitter acquisition.
Like, the actions of the future owner of the social network had a negative impact on the company and are generally dishonest.
The current owners of the company complain that the acquisition process is very chaotic. This greatly affected the stock price and made it volatile.
According to the source, in a proposed class action lawsuit filed on Wednesday, May 25, Twitter shareholders allege that Musk violated California corporate law on several counts at once, while engaging in market manipulation.
– In one of the accusations, they allege that Musk benefited financially by delaying the disclosure of his Twitter stake and temporarily hiding his plan to become a member of the social network’s board in early April.
– Musk also bought Twitter stock at the time he knew insider information about the company based on private conversations with board members and executives, including former CEO Jack Dorsey, a longtime friend of Musk, and Silver Lake CEO Egon Durban, a Twitter board member. whose firm previously invested in SolarCity before Tesla acquired it.
– The next allegation is that Musk violated California laws by sowing doubts about whether he would complete the deal after signing the purchase contract.
Here we are talking about a statement about bots. Earlier this month, Musk said he was pausing the Twitter acquisition to learn more about the number of fake accounts and automated pages.
In his opinion, the company’s assessment, which showed the presence of only 5 percent of bots, is unreliable, but in fact they are from 20 to 90 percent.
The billionaire demanded new checks, and the current CEO of the company, Parag Agrawal, told him that it simply could not be done in the form in which Musk sees it.
– The shareholders’ complaint adds that all statements about bots are only aimed at bringing down the price or disrupting the deal.
Musk continued to make statements, tweets and act in ways that cast doubt on the deal and substantially lower Twitter shares, creating leverage that Musk hoped to use to either pull out of the purchase or renegotiate the purchase price by as much as 25 percent, what if this complied with would result in an $11 billion reduction in the purchase price,
the class action lawsuit says.
All this has led to the fact that since the purchase of Musk’s first shares, their price has fallen by more than 12 percent.
Although immediately after the news that Musk became one of the shareholders, having bought 9 percent of Twitter’s securities, it grew by 25 percent.
The case has already been filed with the Northern District of California, the shareholders are seeking a jury trial. Both the company and Musk declined to comment.
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