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Twitter Investor Sues Elon Musk for Fraudulent Buyout of Flip-Flop and Public Attacks on Company

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Twitter Investor Sues Elon Musk for Fraudulent Buyout of Flip-Flop and Public Attacks on Company
ET

A Twitter investor filed a lawsuit against Elon Musk, claiming that the world’s richest man’s on-again, off-again acquisition of the social media site and his public criticism of the business were intended to manipulate the stock price. Giuseppe Pampena claims that Musk “basically conceded that he had been bluffing all along” about pulling out of the transaction when he decided last week to buy Twitter at the initially agreed-upon price.

The securities class-action complaint, submitted on Monday in federal court in San Francisco, claims that Musk’s backtracking and his charges against Twitter caused Twitter’s stock price to drop, harming investors while strengthening Musk’s negotiating position.

In April, Musk bid to purchase Twitter for $44 billion, or $54.20 per share (approximately Rs. 4,500).  (roughly Rs. 3.6 lakh crore), but then announced he was pulling out of the deal three weeks later.

The suit claims that Musk then “proceeded to make statements, send tweets, and engage in conduct designed to cast doubt on the transaction and substantially depress Twitter’s stock to create leverage that Musk hoped to use to either back out of the acquisition or re-negotiate the buyout price by as much as 25% which, if accomplished, would result in an $11 billion (roughly Rs. 91,000 crores) reduction in the buyout consideration.” “Musk’s behavior was dishonest and unlawful.”

The Twitter buyout drama has seen Musk previously sued at various times along the route.

Outside of regular business hours, Quinn Emanuel Urquhart & Sullivan LLP, the law firm representing Musk in many legal disputes, including the purchase of Twitter, did not immediately reply.

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