Twitter shareholders accuse Elon Musk of “market manipulation” to lower the price of the social network

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Twitter shareholders have accused Elon Musk of

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Elon Musk continues to buy Twitter, but with new conditions. Photo: Reuters

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Elon Musk’s turns and turns to get Twitter could take him to court. A group of shareholders has sued the CEO of Space X and Tesla, which they accuse manipulating the market to reduce value social network shopping.

According to documents filed in California court on Wednesday, the plaintiffs allege that the Tesla founder had delayed the moment in which he revealed to have entered the Twitter capitala legal obligation from some particular level of participation.

The billionaire -according to the lawsuit- it would have saved 156 million dollarsbecause -he proved- if he informed the market at the right time, he would pay more for part of the shares.

“By delaying the publication of the value of his participation on Twitter, Musk manipulated the market and bought shares (of the firm) at an artificially low price,” the investors ’lawyers objected.

Since the beginning of April value of social network in the stock market changes to the rhythm of official information and tweets from Musk.

Shareholders believe Elon Musk manipulated the market to pay less for the social network.  Photo: AFP.

Shareholders believe Elon Musk manipulated the market to pay less for the social network. Photo: AFP.

When he announced he owned more than 9% of Twitter’s capital on April 4, the stock rose 25%.

He had to include the company directory, which in the end he did not. He then announced his intention to buy the entire San Francisco -based group for $ 44 billion.

The company board objected, but then relented. Musk said he would suspend the operation, but eventually went ahead with his purchase plan.

“Musk spoke, tweeted and took other actions designed to sow doubt and make significantly lower the stock Twitter to give itself some wiggle room it hopes to use to withdraw from the transaction or re-negotiate the price, ”they denounced.

The lawyers recalled that part of the financing of the operation was based on loans tied to Tesla sharesits core company, which lost substantial value after learning of its plans on Twitter.

But, on that plane new things have also multiplied in recent times.

Twitter was certainly one of the values ​​sought on Wall Street on Thursday (+6.35% to $ 39.52), after the announcement, on Wednesday, that Musk had raised its direct capital contribution to buy the social network, in total $ 33.5 billion, up from $ 21 billion initially.

Musk thus waived a credit for 12.5 billion dollars guaranteed in Tesla shares he planned to contract, which also boosted shares of his electric car manufacturing company (+7.43% to 707.73 dollars).

Elon Musk’s tricks to buy Twitter cheap

Twitter, the social network created by Jack Dorsey, is in Elon Musk’s sights.  Photo: AFP.

Twitter, the social network created by Jack Dorsey, is in Elon Musk’s sights. Photo: AFP.

Tesla CEO Elon Musk on Wednesday reviewed the funding plan for his proposed $ 44 billion purchase of Twitter.

Funding changes described in a regulatory document will be reduced by 6,250 million dollars the loan package Musk prepared for Twitter’s purchase. That means Musk has to raise that sum to equity commitments rather than debt.

In this way, the capital portion of the agreement – supported by shares – will increase to 33.5 billion dollars, compared to 27.25 billion dollars announced by Musk three weeks ago.

Papers filed with the U.S. Securities and Exchange Commission did not detail where Musk would get the additional capital, but he stressed that he was still trying to persuade his friend and former CEO of Twitter, jack dorsey -a supporter of the purchase-, so that it can contribute its share to the financing package.

Dorsey, also a co-founder of Twitter, owns a 2.4% stake currently worth about $ 700 million, based on the company’s share price at Wednesday’s closing, according to FactSet Research. Musk owns nearly 9.6% stake, valued at $ 2.7 billion.

Wednesday was also Jack Dorsey’s last day as a member of Twitter’s board of directors, a date set when he stepped down as CEO in November last year.

With information from agencies.

SL

Source: Clarin

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