Shareholders on the social platform claim that the CEO of Tesla has illegally delayed the publication of his share in the company, it is enough that he can buy more shares, but at low prices
Elon Musk’s move – the acquisition of Twitter shares and the refusal to join the board of directors – has angered shareholders, and they are now returning fire with a lawsuit against him.
The shareholders claim that Musk illegally delayed the publication of his share in the social media company, so that he could buy more shares at lower prices. The complaint, filed in federal court in New York, accuses the richest man in the world of violating a regulatory deadline, which until then had to reveal that it had amassed a share of at least 5%.
According to the complaint, Musk did not reveal his status on Twitter until he almost doubled his share to more than nine percent.
The lawsuit alleges that by March 14, the world’s richest man’s share had reached 5%, forcing him to publicly disclose his holdings – according to the U.S. Securities Act. As you may recall, he only revealed his holdings on April 4th.
Musk’s strategy has hit less wealthy investors who have sold shares in the San Francisco company, during the nearly two weeks that Tesla’s CEO has kept his moves secret.
According to regulatory documents, Musk rebounded just over 620,000 shares at $ 36.83 per unit on Jan. 31, and then continued to accumulate more shares on almost every trading day, through April 1st.
As you may recall, about two weeks ago, Musk posted a tweet on his account wondering what to do with the social network’s policy, which he claims violates freedom of expression, and asked if a new platform should be launched. In response, many followers urged him to purchase Twitter – and days later he did make a move that made him the company’s largest shareholder.
He was supposed to join the board, but in the end he refused. Twitter CEO Farage Agrwal posted a letter on Twitter that he sent to employees: “The board and I had many discussions about Elon joining, and also with Elon directly. We were excited to cooperate and clarify the risks to him. We also believed that Elon’s appointment as a loyal member of the company, like all members of the board, “And she’s the best way forward. The board of directors offered him a place.”
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