Money Hungry Twitter Shareholders Go After Musk With Lawsuit

Last week Tesla CEO and SpaceX founder Elon Musk made a surprise purchase of a 9.2% stake in Twitter.

This immediately made Mr. Musk Twitter’s biggest shareholder after purchasing $2.89 billion worth of stock, according to a regulatory filing revealed on Monday by the Securities and Exchange Commission.

According to the SEC filing, Musk owns 73,486,938 shares of common stock out of 800,641,166 Twitter shares. That means, Musk now owns nearly 10% of Twitter.

Twitter announced on April 5 that Musk would join its board of directors, but this week said he had decided not to.

Before the announcement that Eleon would not be joining the board, some Twitter employees, especially engineering manager Jay Holler freaked out. Holler went on a tweeting frenzy finally saying that Musk’s appointment had “radicalized” and “broken” him.

Leading up to the announcement, Holler tweeted and retweeted posts expressing concern about Musk’s polls, and his subsequent buying of a majority stake in Twitter.

At the onset of the announcement Musk’s appointment, which occurred early Tuesday morning, Holler held a space called “Rage Out,” in which he and co-host Ian Brown said Twitter CEO Parag Agrawal “sucks.”

At one point during the day, Holler suggested that Musk’s appointment has “radicalized” him and that the announcement has “broken” him.

By not joining the board, Musk, an active Twitter user, can keep buying shares without being bound by his agreement with the company to limit his stake to 14.9 percent.

Some analysts have suggested Musk has bigger goals including pressuring Twitter into making changes concerning free speech and/or pursuing an unsolicited bid for the company.

As one should have expected, not everyone is happy with these latest developments.

A group of angry Twitter shareholders on Tuesday sued Elon Musk for waiting too long to disclose his 9.2 percent stake in the company.

India Today reported:

Elon Musk was sued on Tuesday by former Twitter shareholders who claim they missed out on the recent run-up in its stock price because he waited too long to disclose a 9.2 percent stake in the social media company.

In a proposed class action filed in Manhattan federal court, the shareholders said Musk, the chief executive of electric car company Tesla Inc, made “materially false and misleading statements and omissions” by failing to reveal he had invested in Twitter by March 24 as required under federal law.

Twitter shares rose 27 percent on April 4, to $49.97 (roughly Rs. 3,800) from $39.31 (roughly Rs. 2,990), after Musk disclosed his stake, which investors viewed as a vote of confidence from the world’s richest person in San Francisco-based Twitter.

Former shareholders led by Marc Rasella said the delayed disclosure let Musk buy more Twitter shares at lower prices while defrauding them into selling at “artificially deflated” prices.

Rasella said he sold 35 Twitter shares for $1,373 (roughly Rs. 1,04,590), or an average price of $39.23 (roughly Rs. 2,990), between March 25 and 29. Musk is worth $265.1 billion (roughly Rs. 20,19,970 crore), according to Forbes magazine.

In the end, this group of investors is not openly objecting to the content of Mr. Musks’ tweets or his various other business dealings, they simply just want to make more money from their Twitter stock, thus the lawsuit.

Either way, life goes on, and predicting what Elon will do next is anyone’s guess.

This story syndicated with permission from Eric Thompson, Author at Trending Politics

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