The never-ending hijinks of Elon Musk’s attempt at acquiring now have a new update. According to new case filings, the billionaire is now being sued by Twitter shareholders for manipulating the company’s stock for personal gains.
The lawsuit which was filed in a federal district court in San Francisco on Wednesday night, states “Musk proceeded to make statements, send tweets, and engage in conduct designed to create doubt about the deal and drive Twitter’s stock down substantially in order to create leverage that Musk hoped to use to either back out of the purchase or re-negotiate the buyout price.”
Over the last month or so (which honestly feels longer), the 50-year old Tesla CEO has made a bid to acquire Twitter, then tried to back out of the bid, and then tried to renegotiate the terms of the deal alleging misleading numbers about automated accounts. Safe to say, it’s been an unpleasant rollercoaster ride of never-ending twists and turns.
Coming back to the story, the lawsuit further reads, “As detailed herein, Musk’s conduct was and continues to be illegal, in violation of the California Corporations Code, and contrary to the contractual terms he agreed to in the deal.”
While Twitter has so far declined to comment on the issue, the lawsuit is said to be proposed by a small group of shareholders, who are hoping the damages would be distributed equally among all the shareholders.
And there’s merit to their argument. Ever since the whole drama began, Musk’s erratic behaviour has caused Twitter stocks have been trading significantly below the agreed-upon buyout price. When the news of the lawsuit broke out, Twitter shares were trading at $40.
What’s more interesting here though is the complaint is seeking an “injunctive relief by the court,” which could mean that Musk may be forced to purchase Twitter at the earlier agreed-upon price.
As far as things on the other side are concerned, Musk has now dropped his plans of using Tesla stocks as leverage to secure loans for the acquisition. Instead, the billionaire will be providing $6 billion in equity from his own finances to complete the deal. We just hope both Twitter and Musk can put this drama to rest as soon as possible.
(Image credits: Twitter, Reuters)