Angry Twitter Shareholders Sue Elon Musk Over Delay in Stock Disclosures
By Jim Hoft
Published April 13, 2022
According to the SEC filing, Musk owns 73,486,938 shares of common stock out of 800,641,166 Twitter shares. That means, Musk now owns nearly 10% of Twitter.
Not everyone is happy with this latest development.
A group of angry Twitter shareholders on Tuesday sued Elon Musk for waiting too long to disclose his 9.2 percent stake in the company.
India Today reported:
Elon Musk was sued on Tuesday by former Twitter shareholders who claim they missed out on the recent run-up in its stock price because he waited too long to disclose a 9.2 percent stake in the social media company.
In a proposed class action filed in Manhattan federal court, the shareholders said Musk, the chief executive of electric car company Tesla Inc, made “materially false and misleading statements and omissions” by failing to reveal he had invested in Twitter by March 24 as required under federal law.
Twitter shares rose 27 percent on April 4, to $49.97 (roughly Rs. 3,800) from $39.31 (roughly Rs. 2,990), after Musk disclosed his stake, which investors viewed as a vote of confidence from the world’s richest person in San Francisco-based Twitter.
Former shareholders led by Marc Rasella said the delayed disclosure let Musk buy more Twitter shares at lower prices, while defrauding them into selling at “artificially deflated” prices.