Elon Musk, the founder of Tesla Inc., is attempting to acquire Twitter Inc. for $44 billion. Twitter Inc. investors have sued Musk for not telling them about his investment in the company sooner.
According to the investors, Musk saved $156 million by not disclosing that he had purchased more than 5% of Twitter by March 14.
According to the lawsuit, which was filed on Wednesday in federal court in San Francisco, he continued to buy the stock after that and reported in early April that he owned 9.2 percent of the company.
“By waiting to tell the market about his Twitter stake, Musk manipulated the market and bought the Twitter stock at a price that was too low,“ the investors, led by William Heresniak of Virginia, said.
When asked for comments, Musk and his lawyer did not answer right away. Twitter didn’t answer when asked for a comment.
Investors say that Musk’s ability to get the loans he needs to buy Twitter is in “major danger” because he has put up his shares as collateral to get the loans he needs.
On Thursday, the price of a share of Tesla’s stock was around $700. This was down from over $1,000 at the beginning of April.
The Wall Street Journal says that the timing of Musk’s ownership announcement has already led the US Securities and Exchange Commission to start looking into it (SEC).
Musk offered an extra $6.25 billion in equity funding to fund his bid for Twitter on Wednesday. This shows that he wants to close the deal, even though last week he asked Twitter to prove that spambots make up less than 5% of its users.
In their lawsuit, which was filed on Wednesday, the investors asked to be recognized as a group and to be given punitive and compensatory damages in an amount that was not set.
