Twitter investors have launched a lawsuit against Tesla CEO Elon Musk over his bid to purchase the social media giant for $44 billion.
Investors reportedly lodged complaints linked to legal violations under California law, including “false statements and market manipulation”, which apparently launch Twitter’s San Francisco head offices into “chaos.”
The proposed class action lawsuit was filed by Twitter shareholder William Heresniak at the US District Court for the Northern District of California earlier in the week.
He said he filed the lawsuit “on behalf of himself and all others similarly situated.”
Experts are speculating that Musk might be looking for ways to lower Twitter’s $44 billion price tag, which was agreed with the platform’s board in March this year.
Musk disseminated complaints to his 95 million Twitter followers that the deal could not be completed due to worries over the number of fake accounts, known as ‘bots’, on the site.
However, the lawsuit alleges that Musk knew in advance about the number of bots on the social media platform.
The complaint also noted that the SpaceX founder financially benefitted through delaying the announcement of his significant stake in the firm, alongside his intention to join the company’s board.
Musk reportedly saved $156 million in delaying his announcement that he owned over 5% of the group by 14 March.
He continued to buy up shares until he owned 9.2% of Twitter, before revealing his stake in April 2022.
“By delaying his disclosure of his stake in Twitter, Musk engaged in market manipulation and bought Twitter stock at an artificially low price,” said investors in the class action suit.
Twitter shares are currently trading approximately 27% under Musk’s original $54.20 offer price.
Musk had insinuated in early May that he might attempt to negotiate a lower price for the social media platform.
He commented that rehashing the agreement for a discounted price was “not out of the question” at a tech conference where he was speaking.
Musk has not commented so far on the class action since its filing.
