According to Business Insider, a complaint was filed in California on Wednesday by a Twitter shareholder who claims Elon Musk manipulated the share price with his tweets.
Elon Musk secured the deal to acquire Twitter after weeks of back-and-forth negotiations with the company’s board last month.
The recent lawsuit, according to Business Insiders, focuses on the tweet about the deal being “on hold” until Musk could be sure that Twitter’s reported figure that fewer than 5% of the platform’s accounts comprised spambots 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, according to Business Insider.
The complaint claims that Musk used the tweets to bring up the spambots chat to lower the stock price so that he would be able to 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.
The company’s shares have plummeted 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.
“By delaying his disclosure of his stake in Twitter, Musk engaged in market manipulation and bought Twitter stock at an artificially low price,” the Twitter shareholders say.
In April, the business magnate bought a 9.2% stake in Twitter, more than four times the 2.25% holding of Twitter founder Jack Dorsey and that saw the company’s shares soar about 25% of the pre-market trading.
By Zintle Nkohla
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