Elon Musk is facing a lawsuit, he is accused of manipulating and tanking the Twitter stock price with the aim of seeking either to get an escape route from the biggest deal worth $44 Billion or to obtain a valid point to negotiate for more discount.
Lawsuit File By Shareholders Against Elon Musk
The lawsuit describes the action that Elon Musk intentionally made a statement on Twitter to create doubt regarding the deal, which has disturbed the social media platform for days.
A lawsuit filed by a shareholder sought the suitable action against this manipulation and asked the Federal Court, San Francisco, to support the validity or authenticity of the deal. Moreover, the claim requests the court to provide compensation to shareholders for the damage done according to the law.
Elon’s Tweet That Started The Doubt
Last week Elon Musk made a statement that the Twitter deal will not be finalised unless he is provided with the proof that shows the number of spam accounts infesting the platform. This statement added more indecisiveness about his aim to pursue the platform.
A tweet from Musk that proved to be a doubt raiser regarding his deal was “temporarily on hold”. But the suit argued that there is no such point made in the contract of this deal.
Tweet Says, “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.”
And a few hours later he tweeted another and said he is still committed to the deal.
Arguments & Claims Made By The Lawsuit
The suit filed by William Heresniak, Virginia said that Musk advanced his biggest deal while lacking the assiduity that is expected in such megadeals.
The suit asserts that the final contract is only required to be authorised by Twitter and its shareholders and was supposed to be finalised by October 24, 2022.
The suit also argued that Musk knew from the start that several accounts were managed by the bots, not by real people and he also made a statement on Twitter about it prior to announcing his bid for acquisition.
The complaint exactly reports 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.”
Claim also states that Musk successfully tanked the shares as his manipulation worked, resulting in Twitter losing $8 Billion in terms of valuation since the bid was announced.
As per court filing, “Musk’s disregard for securities laws demonstrates how one can flaunt the law and the tax code to build their wealth at the expense of the other Americans.”