Investors believe that Mask’s Twitter posts are misleading and are aimed at influencing the value of the company’s shares in the market.
Twitter investors have filed a class action lawsuit against American businessman, SpaceX founder and Tesla CEO Ilona Mask in the US District Court in the Northern District of California. He was accused of “illegal conduct”, “violation of California corporate law” and “market manipulation”. This was reported by the BBC.
The group’s lawsuit was filed by Twitter investor William Heresnyak, who said he was acting “on his own behalf and on behalf of all others in a similar situation.” Mask’s lawsuit alleges “misconduct because his false statements and manipulation of the market created chaos at Twitter’s San Francisco headquarters.”
Investors also believe that Mask’s Twitter posts are misleading and are aimed at influencing the value of the company’s shares in the market. In particular, this is a post in which Musk announced that he was suspending the deal to buy the company due to doubts about the number of fake accounts on the platform. “The May 13 tweet is an attempt to manipulate the Twitter stock market because he knew about fake accounts,” the lawsuit said.
Twitter declined to comment, and Mask and Tesla’s lawyers have not yet commented on the situation.
Read also: How Twitter will change with the arrival of Ilona Mask
Earlier, Twitter said that only 5% of social media accounts are fake. Musk then suspended the deal to buy the company. He also said that “the deal can not move forward” if Twitter does not provide evidence that the number of bots does not exceed 5% of daily active users per month during the quarter. At a conference in Miami, the businessman said that fake users accounted for at least 20% of all Twitter accounts, and suggested that the figure could reach 90%. He also said that his team will conduct its own check of 100 random Twitter accounts to find out the number of fake ones. Following these statements, according to Mask, Twitter lawyers accused him of violating the rules of non-disclosure (NDA). Musk later said that he estimated that 50% of Twitter accounts were bots. The British publication The Guardian wrote that in this way Musk “lays the groundwork for revaluation of the agreement or abandonment of it.” This is confirmed by the statements of the businessman at a conference in Miami, where he suggested that “he could try to pay a lower price for Twitter.”
It will be recalled that in March 2022, Elon Musk became the owner of 9.2% of Twitter shares, a block of shares could cost Mask almost $ 2.9 billion. He is currently the largest external shareholder of Twitter. According to media reports, the Mask package is four times higher than the share of social network founder Jack Dorsey, who owns 2.25% of the company’s shares. Musk was scheduled to become a member of Twitter’s board of directors on April 9, but refused to join the board.
In April, it became known about Mask’s plans to buy the company. Bloomberg wrote that Musk offered to buy Twitter for $ 43 billion, while the market price of Twitter reaches about $ 37 billion. The company’s board of directors was initially skeptical of Mask’s proposal, but later supported it after consultations. The parties discussed the agreement throughout the night, and the meeting began on April 24. The next day, it became known that Elon Musk bought Twitter for $ 44 billion. Since then, the company has become private. Musk also said he planned to make Twitter “politically neutral.” He made this statement against the background of the fact that users began to massively delete their accounts from the social network.
Twitter Chairman Brett Taylor has announced that the company’s board of directors will close after closing the deal with Elon Musk. Twitter CEO Parag Agraval remains in office until the deal closes. Twitter founder Jack Dorsey has supported the sale of Mask. He said that Twitter should not have a specific owner or leader, the social network should remain a “public good” and not a company in the classical sense. According to him, the fact that Musk bought Twitter is the only decision he trusts.