Elon Musk was hit by A lawsuit filed by a Twitter contributor Which accuses the CEO of Tesla of criticizing the company he agreed to buy and sowing doubts about the deal in order to reduce the value of Twitter.
The proposed class action, filed Wednesday in the US District Court for the Northern District of California, alleges that Musk aims to lower Twitter’s stock price because he either wants to walk away from the deal or Negotiate a lower purchase price.
The lawsuit, also called Twitter, argues that Musk’s attacks violated both the terms of his contract with the company.
Musk proceeded to make statements, send tweets, and engage in behavior designed to cast doubt on the deal and drive Twitter’s stock dramatically lower in order to create leverage that Musk hopes to use either to undo the purchase or to renegotiate the purchase price by as much as 25%, which , if realized, would result in an $11 billion reduction in purchase consideration,” the lawsuit states.
“Musk’s conduct was, and continues to be, unlawful, in violation of California corporate law, and in conflict with the contractual terms he agreed to in the transaction,” the lawsuit adds.
Musk made an agreement last month to Buying a social media company for $44 billion, but he has since publicly complained repeatedly about Twitter. In particular, he challenged the number of bot or spam accounts, which Twitter reported to be less than 5% of the accounts. musk I speculated badly at a tech conference Earlier this month, the percentage of fake accounts could reach 95%.
He also announced that he was delaying the purchase, although he was still “committed” to the deal. Later said a A lower purchase price was not out of the question.
Since Musk’s takeover bid – and grumbles – Twitter’s stock price has plummeted decreased more than 12%and Tesla fell by about 28%.
Twitter shares closed Thursday at $39.54 – 27% less than Musk’s offer of $54.20 per share to buy the company.
Musk was using Tesla stock to fund the purchase of Twitter. But he’s done it since then Increased his personal finances by more than 6 billion dollars It received an additional $6.25 billion in equity financing, according to regulatory filings on Wednesday.
The lawsuit also accuses Musk of insider trading by buying shares while speaking with company board members, and failing to meet a legally required deadline to inform the Securities and Exchange Commission that he acquired a 5% stake in the company. The Securities and Exchange Commission sent a letter to Musk They demand an explanation for missing the deadline.
Musk could not be reached for comment, and no statement was issued regarding the lawsuit.
