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Twitter shareholders are suing Ilona Maska and Twitter itself for a chaotic acquisition process that is still ongoing and which has contributed to volatile fluctuations in the company’s stock price.
The CEO of Tesla and SpaceX showed a significant stake in Twitter on April 4, and ten days later offered a buyout for $ 44 billion, or $ 54.20 per share. He sold and mortgaged part of his Tesla shares as collateral for loans to finance the deal.
Since Mask’s bid, Twitter’s stock price has fallen more than 12%, and Tesla has fallen about 28% as part of a broad sale of technology shares. Tesla’s share price fell about 40% after Musk first showed his stake.
In a proposed class action lawsuit filed Wednesday, Twitter shareholders allege that Musk violated California’s corporate laws on several fronts, while participating in market manipulation.
First, they claim that Musk benefited financially by postponing the demand to disclose his stake in Twitter and temporarily hiding his plan in early April to become a member of the board of the social network.
Musk also acquired shares on Twitter, the complaint said, while he knew insider information about the company based on private conversations with board members and executives, including former CEO Jack Dorsey, Musk’s longtime friend, and Silver Lake CEO . Egan Durban, a board member of Twitter whose firm had previously invested in SolarCity before Tesla acquired it.
On Wednesday, Dorsey officially resigned from Twitter’s board of directors. Shareholders voted not to restore Durban.
The proposed class action lawsuit also alleges that Musk violated California law by sowing doubts about whether he would complete the deal after signing a contract to buy it.
Earlier this month, Musk said he was stopping acquiring Twitter to learn more about invalid activity on the platform, including around fake or automated accounts.
The shareholders’ complaint states that his complaints about the “bots” were part of a scheme to negotiate a better price or destroy the deal:
“Musk continued to make statements, send tweets and engage in behaviors aimed at casting doubt on the deal and significantly reducing Twitter shares to create leverage that Musk hoped to use to abandon the purchase or to renegotiate. the redemption price is as much as 25%, which, if done, will reduce the ransom by $ 11 billion. ”
Under California law, state corporations must disqualify board members from voting on proposals if they commit certain types of violations that are relevant to or related to those proposals.
Twitter declined to comment. Musk did not respond to requests for comment.
The case of Geresnyak v. Mask et al. has been filed in the Northern District of California, and shareholders are seeking a jury trial. The shareholders’ complaint is subject to further processing.
Twitter shareholders have sued Ilona Maska and Twitter for a chaotic deal
Source link Twitter shareholders have sued Ilona Maska and Twitter for a chaotic deal