Elon Musk has landed himself a fresh lawsuit from Twitter shareholders. The billionaire is alleged to have manipulated the company’s shares for his personal gain.
The suit was filed in federal district court in San Francisco, focusing on his recent statement that the purchase of the social media platform would not proceed until Twitter could furnish him with an accurate count of bots and scam accounts on the platform.
According to the lawsuit, “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 renegotiate the buyout price.
“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.”
While the lawsuit was filed by a small group of shareholders and is potentially a class-action effort, any damages awarded are to be shared by everybody owning Twitter stock.
Since announcing the stalemate, Musk has not publicly mentioned canceling the deal or renegotiating the agreed $43 billion offer. Twitter stock is trading at $40, well below Musk’s buying offer of $54.20, showing investors were skeptical of the deal.
The lawsuit is also potentially requesting that Musk be forced to complete the deal at the agreed price.
Twitter executives recently assured shareholders that they are still working on the deal, although they did not reveal much information about the progress or the future of the social media platform.
Musk has been making public statements disparaging the company he is planning to take over, and there is little doubt that they have affected his proposal. Even his company, Tesla, has seen its stock dip so much that Musk can no longer use his shares to secure loans to finance Twitter’s purchase. He revealed to the Securities Exchange Commission that he would secure $6 billion more in equity financing.
Musk claims he wants to restore free speech on Twitter by taking it over, and he is not interested in the money to be made in it. However, his investor’s speech deck details a plan to increase the company’s revenue through subscriptions. He has said he would welcome back former President Donald Trump, who was banned permanently from the platform last year.