Investors Sue Musk for Late Disclosure of Stock on Twitter

  • Twitter investors sued Elon Musk for delaying the disclosure of his stake in the social media company.
  • Investors said Musk saved $156 million by not disclosing that he had bought more than 5% of Twitter before March 14.
  • By delaying the disclosure of his Twitter stake, investors said Musk manipulated the market and bought shares in the company at an artificially low price.
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Billionaire Elon Musk has been sued by Twitter investors for delaying the disclosure of his stake in the social media company.

In the lawsuit, filed Wednesday in California federal court, investors say Musk saved $156 million by failing to disclose that he had bought more than 5% of Twitter before March 14. They added that he continued to buy shares after that, eventually revealing in early April that he owned 9.2% of the company.

“By delaying the disclosure of his Twitter holding, Musk manipulated the market and bought Twitter stock at an artificially low price,” said the investors, led by Virginia-based William Heresniak.

The purchase of Twitter continues to be hindered, but in progress

The lawsuit comes after Musk, CEO of Tesla and SpaceX, announced the purchase of Twitter for $44 billion; same that has been hindered because the billionaire said that he will not buy Twitter until the platform proves to have less than 5% of false accounts.

Despite this, Twitter executives assured employees last week that the purchase by Musk will go ahead.

In turn, the billionaire pledged this week to provide an additional $6.25 billion in capital to finance part of the Twitter purchase deal, according to a filing Wednesday with the regulator.

Tesla’s top boss is also in talks with shareholders, including Jack Dorsey, to make additional financial commitments to fund the business, according to the document.

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With information from Reuters.

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