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Elon Musk sued by Twitter stakeholders for market manipulation


There has been a great deal of activity since Elon Musk commenced the deal to acquire Twitter for $44 billion.

Conversations have centred around the openness and credibility of the deal, with questions as to whether everything was put on the table emerging.

On Wednesday a complaint was filed at a California court, with allegations that Elon Musk was issuing misleading information, leading to fall in Twitter share price.

“By delaying his disclosure of his stake in Twitter, Musk engaged in market manipulation and bought Twitter stock at an artificially low price.” Said one of the investors.

Since Musk signed the deal to purchase Twitter on April 25th, there have been speculations over the direction of the company. Shares of his electric vehicle manufacturing firm Tesla have also been fluctuating.

The lawsuit filed by a section of shareholders claims that “Musk proceeded to make statements, send tweets, and engage in conduct designed to create doubt about the deal and drive Twitter’s stock down substantially in order to create leverage that Musk hoped to use to either back out of the purchase or re-negotiate the buyout price.”

The case was filed by a small group of shareholders who feel disadvantaged by Musk’s action. Twitter declined to comment on the new development.

The complaint further observes that “ Musk’s conduct was and continues to be illegal, in violation of the California Corporations Code, and contrary to the contractual terms he agreed to in the deal.”

Musk is still intent on purchasing Twitter and the deal seems unstoppable for now. However, his actions, comments and the prerequisite deal have raised concerns from different quarters.

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Simon W Nderitu

Simon is a tech enthusiast who keeps a close eye on emerging technologies, startups and the general business environment. You will often catch him totally immersed and drooling over Artificial Intelligence, Machine Learning, Virtual Reality, Augmented Reality, IoT and just about any other tech that promises to revolutionize the way we live. Send tips to snderitu@techtrendske.co.ke

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