According to Deadline, shareholders of the social media platform have launched a class action lawsuit against Musk and Twitter, accusing him of unjust enrichment, misleading claims, and stock manipulation in an attempt to lower or avoid paying the $44 billion settlement.
Musk secured a bank loan by offering billions in Tesla equity in exchange for the $44 billion. However, according to the complaint, Tesla shares plummeted in the month after the news of his acquisition. Musk began to “make false statements and engage in market manipulation of Twitter stock” at this period, as well as stating that their agreement was “on hold.”
Furthermore, Musk failed to disclose that he owned a 9.2 percent ownership in Twitter when he was required to, prompting an SEC probe. “Musk first agreed to join the Twitter board of directors as an ally, then reversed that decision in favor of a takeover bid and threatened to go hostile if Twitter didn’t accept,” according to Deadline.
His purchase of Twitter was completed in late April, but it must still be approved by shareholders at a special meeting that has yet to be scheduled. He announced earlier this month that his acquisition of the social media firm is “temporarily on hold” owing to the large number of “fake” accounts on the network.
“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5 percent of users,” he tweeted. “Still committed to acquisition.”