Elon Musk Passes Jeff Bezos As Richest Man In The World

Elon Musk Sued By Investors Over Twitter Takeover Bid

Posted by: Kyeyune Andrew Jonathan in Tech May 27, 2022

On the other side of the world, Twitter investors are suing Elon Musk and the platform over handling of the billionaire’s $44bn bid for the company. The case alleges he violated California corporate laws in a number of ways.

The Tesla boss is accused of “wrongful conduct”. This is because his “false statements and market manipulation have created ‘chaos’ at Twitter’s headquarters in San Francisco”. The market value of Twitter shares is around 27% lower than Mr Musk’s $54.20 offer price.

The suit also revealed that by delaying the disclosure of his significant stake in Twitter, and his plan to become a board member of the company, Mr. Musk financially benefited.

Other claims are that several tweets Mr. Musk made on the platform regularly were misleading.

This included a post in which Mr. Musk said his takeover bid for the social media firm was on hold because of his doubts over the number of fake accounts on the platform.

The lawsuit further said the tweet on 13 May constituted an effort to manipulate the market for Twitter shares as he knew about the fake accounts.

Four days later, Musk reportedly doubled down on his allegations, by stating on Twitter that the deal “cannot go forward.

Analysts have speculated that Mr Musk is looking for ways to lower his takeover offer or walk away from the deal.

Investor William Heresniak filed the proposed class-action lawsuit this week at the US District Court for the Northern District of California. He said his actions were on behalf of himself and all others similarly situated.

Mr Musk’s lawyers and Tesla did not immediately respond to a BBC request for comment on Friday. Twitter also declined to comment when contacted by the BBC.

Earlier this month, Twitter confirmed that two of its bosses leading its consumer and revenue operations were leaving the company. The firm has also paused most hiring except for “business-critical roles”.

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