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Elon Musk sued by Twitter investors for market manipulation

Published by
Abhishek Malhotra

Elon Musk, who is still pending to buy Twitter has been sued by the Twitter shareholders in federal district court in San Francisco on Wednesday, May 25, alleging that the Tesla CEO has manipulated the company’s stock for personal gain. The lawsuit from Twitter investors focuses on Musk’s conduct since he signed the purchase agreement for Twitter, which was on April 25.

After signing the agreement, the complaint over which Elon Musk has been sued by Twitter investors, says 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”.

For those who are wondering, Musk posted multiple tweets on the platform regarding his deal where he said that amount of bots on the platform are a point of worry

and that he may seek a lower price for Twitter buyout. He also made it public that the deal between him and Twitter where he was earlier buying the platform for $44 billion was on hold temporarily.

“As detailed herein, 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”, the complaint continued to read. Lastly, the complaint asks for injunctive relief by the court, which may potentially force the Tesla CEO to purchase Twitter at the price he earlier agreed to pay.

In related news to Twitter, the microblogging platform has recently agreed to pay $150 million fine to FTC for breaking the law. The Federal Trade Commission and the Department of Justice have claimed that Twitter violated a 2011 agreement with regulators in which the company pledged to not use user information to help advertisers target people with ads.

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Published by
Abhishek Malhotra