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Accusation of course manipulation – Twitter shareholders sue Elon Musk – News

  • Shareholders of the short message service Twitter have sued Tesla boss and multi-billionaire Elon Musk.
  • They accuse him of not having announced the purchase of more than 5 percent of Twitter shares in time.
  • As a result, Musk unjustifiably saved $ 156 million, according to the allegation of the shareholders.

Musk announced in early April that he owned 9.2 percent of the San Francisco-based company, according to the lawsuit filed in federal court in California. However, he should have given notice of his share purchase by March 14.

Since Musk initially benefited from a comparatively low price, it was a form of market manipulation. Neither Musk nor Twitter have commented on this so far.

Stock market reacts sensitively

However, stock market prices have reacted. Because to finance the takeover, Tesla owner Musk sold shares in the electric car manufacturer. The value of Tesla’s shares has fallen by almost a third since the announcement of its plans with Twitter.

And the Twitter course also reacted. The stock is up more than 5 percent in early trading since it was announced that Twitter shareholders had filed a lawsuit against Musk over the acquisition.

Benefited from lower price

“When a major takeover is announced, the stock market price of the company that is to be taken over usually rises,” explains SRF business editor Maren Peters. “But if the public is not informed in time, the course will not react.” This is also shown by the example of Twitter: when Musk announced that he had secured almost ten percent of Twitter, the share price of the short message service shot up by a quarter.

Musk continued to buy shares in Twitter at a relatively low price because he did not provide information about his share purchase earlier and was able to make a hefty profit, Peters continued. “If that were to be confirmed, then he would have violated the law, which stipulates certain disclosure requirements if someone has acquired a certain number of shares in a company.”

Takeover pending

It is currently not clear whether this acquisition will even be completed. “Musk offered to buy Twitter for $44 billion last month, but later said the deal couldn’t go ahead until Twitter provided full information on how many Twitter accounts weren’t active,” Peters said. “Critics, however, suspect that it is a ruse by Musk to push the price down.”

At the moment, the takeover is on hold – the outcome is open.

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