A Twitter investor has sued Elon Musk, Tesla CEO and richest man in the world, for “misleading statements” in context of his acquisition of a 9.2% stake in Twitter which led him and other investors to lose money from the end of March to early April. The plaintiff seeks to obtain a class-action status for his suite, claiming to represent other investors who lot money in the same period.
According to the plaintiff, he sold his shares at “artificially deflated prices”, which he would not have done if Musk had publicly declared his purchase of the shares as is required by United States law. As per the law, any investor acquiring 5% take or above in an entity must disclose the purchase at least 10 days prior to the Securities and Exchange Commission (SEC). As per the lawsuit, Musk should have informed the SEC by March 24th, which he failed to do until April 4th, when he filed papers with the SEC saying that he had acquired 9.2% of the company.
After the announcement, Twitter stock rose by over 27% and crossed the $50 mark. The plaintiff claims that he suffered a loss since he had sold 35 shares for $1,373 in the time period between Musk buying his shares and making the announcement.
The lawsuit states: “Plaintiff and the Class would not have sold Twitter’s securities at the price sold, or at all, if they had been aware that the market prices had been artificially and falsely deflated by Defendant’s misleading statements”.
Elon Musk, the SEC, and Twitter have not commented on the lawsuit yet.
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