Elon Musk Sued by Twitter Shareholders for “Emptying” Share Price

Twitter shareholders are suing billionaire Elon Musk for “hollowing out” the stock price. By doing so, the social network’s $44 billion bid would be traded at a lower than indicated price.

According to the lawsuit, filed Wednesday in Federal Court in San Francisco, Musk tweeted and made remarks to raise doubts about the deal, which has been causing stock price fluctuations for weeks.

An example of this was when the billionaire temporarily suspended the acquisition deal, as he wanted to confirm the number of fake accounts that exist on Twitter. The statement generated more uncertainty about the purchase of the social network, causing the share price to fall.

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Elon Musk is sued on charges of manipulating the market

The lawsuit further highlights that Musk was aware that several Twitter accounts are controlled by “bots”, and that the entrepreneur waived the right to scrutinize the company’s non-public finances.

Its purpose, according to the lawsuit, was to gain the upper hand to acquire Twitter for a much lower price or to exit the deal without suffering any penalty. This strategy has been working very well, since since the acquisition was announced, the social network has lost US$ 8 billion in market value.

“Musk’s disregard for securities laws demonstrates how anyone can flaunt the law and tax code to build their wealth at the expense of other Americans”says the court case.

Musk did not respond to press inquiries sent to his publicist. Twitter, on the other hand, said it is committed to completing the acquisition without delay on the price and terms agreed.

It’s not the first time Elon Musk has manipulated the market

This isn’t the first time Elon Musk has manipulated the stock market via Twitter. In 2018, the billionaire’s activity on social media ended up earning him a lawsuit at the American Security and Commerce Commission (SEC).

At the time, Musk had written in a tweet that he would have enough funds to take Tesla private, thus being accused of manipulating the market with false information. On that date, the company lost $14 billion in market value in just one hour.

Musk received a multimillion fine and the SEC forced Tesla to oversee the billionaire’s tweets through a legal team. However, the measure did not work, as the billionaire has been repeating this action over the years.

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