The latest in the Twitter-Elon Musk circus has shareholders of the social media company seeking class action status for a lawsuit against the billionaire Tesla founder, alleging unjust enrichment, false statements and stock manipulation in order to lower the price or walk away from the $44 billion deal he’d agreed to. Musk had originally financed the purchase in part by pledging billions of dollars in Tesla stock as collateral for a bank loan.
That became a problem as Tesla stock plunged in the 30 days after the announcement, says the suit (read it here) in U.S. District Court in the Northern District of California. As Tesla stock dropped, “Musk begins to make false statements and engage in market manipulation of Twitter stock,” including by announcing that the deal was “on hold.” The suit, filed Wednesday, also revisits the fact that Musk didn’t disclose his 9.2% stake in San Francisco-based Twitter when he was required to – something the SEC is investigating – and the unusual way events unfolded.
That is, Musk first agreed to join the Twitter board as an ally, then reversed that decision in favor of a takeover bid and threatened to go hostile if Twitter wouldn’t accept.
Musk and Twitter inked the $54.20-a-share cash deal in late April.
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