Class action lawsuit against Elon Musk over his stance on Twitter

Elon Musk is facing a class action lawsuit over his investment in Twitter. An American multibillionaire would not follow this procedure.

Elon Musk has been the majority shareholder of Twitter for only a few weeks and is already facing a class action lawsuit condemning his management of the investment. A Twitter shareholder has filed a class-action lawsuit against the American billionaire over his 11-day delay in formalizing his Twitter investment with the SEC.

Elon Musk faces class action lawsuit over investment in Twitter

Under current law, Musk was required to file all paperwork with the SEC by March 24, 2022, 10 days after the 5% increase in his stake, but he didn’t do so until April 4. This delay may not seem like much, but it could have netted him at least $156 million. If the data is to be believed, these returns would have come at the expense of other shareholders who could not have made the same profit.

“Investors who sold Twitter shares between March 24, 2022, when Elon Musk was due to formalize his stake in Twitter, and April 4, 2022, the effective date of the transaction, could not benefit from the increase in share price in the market reaction to purchases of Elon Musk and, therefore, have suffered damage, ”the complaint says.

An American multibillionaire would not follow the procedure

According to the shareholder who initiated the class action, he and other investors sold the shares at “artificially low”prices as a result of Elon Musk’s actions. The filing also accuses Elon Musk of “making false and misleading statements and some omissions by failing to inform investors that he acquired a 5% stake in Twitter as he was required to do so.”

This lawsuit comes after several chaotic days for Twitter and Elon Musk. The Tesla CEO initially agreed to join Twitter’s board of directors, much to the dismay of some employees, but that decision was eventually reversed a few days later after several bizarre tweets from the multibillionaire, who, in part, initiated a survey of his followers asking his followers should whether Twitter will change. his name and who wondered if the service was “dying”.

In an email to employees, Twitter CEO Parag Agrawal clarified that as a board member, Elon Musk would be “the trustee of the company, where he, like all board members, must act in the best interests of the company and all shareholders.”And to add that he was convinced that, in the long run, it was better that Elon Musk did not hold such a position.