A group of Twitter shareholders has filed a lawsuit against Elon Musk for blowing up the company’s share price with his repeated comments about it, which they believe violates the purchase agreement signed between the social network and the billionaire. They point directly to Musk’s statement “temporarily” putting the acquisition process on hold due to the presence of bots and fake accounts on Twitter, which plunged the company’s value by 25% on the stock market.
What’s behind Elon Musk’s maneuver with fake Twitter profiles
After committing to pay some 40,000 million euros for the social network, Musk questioned whether the number of false profiles – those that are not managed by any real person or organization and therefore are not “monetizable” by not consuming advertising displayed on the platform—is actually less than 5% of total users, as Twitter claims.
Days later, the co-founder of Paypal, Tesla or SpaceX, who has the largest fortune in the world according to Forbes, insisted on the matter and asserted that the number of false profiles on Twitter could be even greater than 20% of total users. However, he did not offer any proof in this regard and his comments seemed to be based on the responses and interactions that his own tweets receive.
In the demandadvanced by the American media TheVergeShareholders say Musk commissioned an analysis of the company that included the bots and fake accounts issue “as a precondition to his obligations under the purchase agreement.” “Musk does not have and did not have the right to cancel the purchase based on any results of due diligence in relation to the number of fake or spam accounts on Twitter,” they allege, for which they denounce that the tycoon’s chain of comments on this matter is “an effort to drive down the price of the shares even more” and get hold of them “at a bargain price”.
The plaintiffs also uncover alleged irregularities in Musk’s initial stock purchase process. The billionaire began buying shares of the social network in January, but they assure that he kept it a secret so as not to cause a rise in its price and to be able to continue acquiring them at low cost, even going beyond the limit of 5% of shares from which the US stock market regulator requires reporting this type of acquisition.
The lawsuit has been filed in a court in California (USA) by a small group of Twitter shareholders, but its results, such as whether Musk is forced to pay compensation for the loss of value of the securities, will apply to anyone who own shares of the social network.
Musk has not stopped the buying process
Elon Musk has not commented on the lawsuit, despite being very active on Twitter after news of his filing broke. The truth is that the tycoon announced shortly after declaring the purchase process “temporarily suspended” that he was still “committed” to carry it out.
His actions support this position, since the tycoon continues to carry out the necessary operations to ensure that his offer has the necessary liquidity. This week Musk has sent a communication to the US regulator to modify the way in which he will finance it: he has withdrawn the loans against his Tesla shares and has promised to put more money from his own pocket, up to 6,000 million dollars more.
This is because since his intention to buy Twitter and remove it from Wall Street was made public, Tesla shares have fallen 40%. This collapse has personally affected Musk, who has a large part of his fortune invested in the electric car manufacturer – almost 50% of his total capital, which has fallen from 250,000 million dollars to 197,000 due to this depreciation of Tesla. and used a part of those titles as collateral for the sum that it has put on the table to buy the social network.
Contacted by this means, Twitter has also made no comment regarding its shareholders’ lawsuit against Musk.