Elon Musk Dragged to Court by Twitter Shareholders For Failing To Disclose Stake in Time
- Former Twitter shareholders, who sold their shares to Elon Musk, have sued the billionaire businessman to court
- They contend that Musk deceived them when he failed to disclose how much stake he acquired in the social media firm in time
- The US securities laws says that shares from 5 per cent must be disclosed within 10 days of acquiring them
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Former Twitter shareholders have dragged the world’s richest man, Elon Musk to court for failing to reveal his stake in Twitter on time.
The shareholders say they missed out on the recent events in Twitter’s stock price because Musk waited long before disclosing a 9.2 per cent in the microblogging site, according to Reuters’ report.
Source: Getty Images
In a class action filed in the Manhattan federal court, New York, the stakeholders said the billionaire businessman made false and misleading statements and omissions by not revealing he had invested in Twitter by 24, 2022, as the law requires.
Soaring stock shares and why Musk was sued
The social media company's shares soared to 27 per cent on April 4, 2022, to $49.97 from $39.31 after Musk revealed his shares, which was seen by investors as an endorsement by the Tesla CEO on Twitter.
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The former stake owners who are led by Marc Rasella said that the delay in disclosing the shares allowed Musk to buy Twitter shares at lower prices as he defrauded them into selling at low prices.
The suit seeks undisclosed payment and damages from the billionaire and maybe, Twitter.
What the law says
According to US securities laws, investors who buy shares in firms must show in 10 days when they have bought 5 per cent of a company, which in the case of Musk should have been March 24, 2022.
The social media giant stated on April 5, 2022, that the maverick businessman would join its board of directors but later said this week that SpaceX CEO decided against it.
By not joining the board, Musk who is a Twitter buff can keep buying stakes as he is not bound by his agreement with the company which would have limited his stakes in the company to 14.9 per cent.
Musk to the rescue?
Musk has been suggesting far-reaching improvements since he bought the stakes which analysts say could push the social media firm to implement some drastic changes or even pursue a bid for the company.
Rosella stated that he sold his 35 shares in Twitter for $1,272 or an average price of $39.23 on March 25 and 29. Forbes magazine said the Tesla owner is worth $265.1 billion.
Elon Musk concedes the richest man in the world title to Vladimir Putin
Legit.ng has reported that Tesla and SpaceX CEO, Elon Musk says he may be the richest man in the world in theory, but believes that he only holds the title.
The Russian President, Vladimir Putin, Elon Musk says, is the richest man in the world in the actual sense of the word, a report by Fortune says.
Musk says he thinks Putin is immensely wealthier than him, he told Mathias Dopfner, the CEO of Axel Springer, the parent company of Business Insider on Saturday, March 26, 2022.
Source: Legit.ng
