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Elon Musk and Twitter sued for takeover irregularities

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An investor in Twitter is suing Elon Musk and the social media network over the handling of Musk’s $44 billion (£34.9 billion) offer for Twitter.

In a variety of ways, it is alleged that he broke California corporation laws.

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It accuses the Tesla CEO of “improper behavior” because his “false comments and market manipulation have produced ‘chaos’ at Twitter’s San Francisco headquarters.”

Twitter shares are around 27% less expensive than Mr. Musk’s $54.20 bid price.

This Monday, investor William Heresniak filed a proposed class action complaint in the US District Court for the Northern District of California, stating that he was acting “on behalf of himself and all others similarly situated.”

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A class action is a lawsuit brought or defended on behalf of a group of individuals by an individual.

The complaint said that Mr. Musk benefited financially by delaying the disclosure of his substantial position in Twitter and his intention to join the company’s board of directors.

It also alleged that a number of Mr. Musk’s comments, who is an avid Twitter user with over 95 million followers, were “misleading.”

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It featured a tweet in which Mr. Musk said that his takeover attempt for the social media company had been put on hold due to his concerns with the number of phony accounts on the network.

The message on 13 May “constituted an attempt to influence the Twitter share market as he was aware of the bogus accounts,” according to the complaint.

It was also stated that Mr. Musk “doubled down” on his charges four days later by tweeting that the merger “cannot proceed.”

Frank Bottini, one of the attorneys representing the Twitter investors, told the BBC on Friday that the lawsuit was launched because Mr. Musk “continues to trash the business he wants to acquire for $44 billion in an attempt to renegotiate the acquisition price.”

Mr. Bottini stated, “The case we filed in San Francisco attempts to hold Musk accountable for his illegal activity.”

Friday, Mr. Musk’s attorneys and Tesla did not reply quickly to a BBC request for comment.

The BBC requested a statement from Twitter, but Twitter declined.

Analysts have suggested that Mr. Musk may be searching for methods to reduce his takeover bid or withdraw from the transaction.

He has expressed worry on Twitter several times about the proliferation of bogus accounts or bots.

A bot is a software program that sends automated social media messages and is frequently related with disinformation.

Mr. Musk has also intimated that he may attempt to pay less than the $44 billion agreed upon by Twitter’s board of directors in March.

At a technology conference earlier this month, he stated that negotiating a cheaper price was “not impossible.”

A Florida pension fund opposed Mr. Musk’s bid to acquire Twitter earlier this month on the grounds that a transaction could not be reached within the allotted time frame.

The Orlando Police Pension Fund stated that Mr. Musk was a “interested stakeholder” in Twitter because he had established arrangements with important shareholders, including the company’s co-founder Jack Dorsey, prior to making an offer to purchase the company.

Citing the legislation of the US state of Delaware, where Twitter is established, the company stated that the transaction should not be permitted to occur before 2025.

Although the fund did not reveal its ownership in the social media site, it claimed to have been “a beneficial owner of Twitter common shares at all relevant times.”

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