‘It hailed as soon as he shaved his head.’ This saying has come true with Elon Musk; Tesla and SpaceX company CEO Elon Musk did a big job in the past. With which he dominated the world, and now due to this extensive work, he is in trouble. The difficulty is such that the date will be taken to court. People filed the case. Know what the matter is?
Former shareholders dragged to court.
Elon Musk said on April 4 that he has a 9.2 per cent stake in Twitter. He became Twitter’s largest shareholder when he bought 9.2 per cent of the shares. Now some former Twitter shareholders have filed a lawsuit against him regarding this.
This lawsuit has been filed in the Manhattan Court of America. In this, some former shareholders have said that Elon Musk announced the purchase of a stake in Twitter too late, due to which they could not get the higher price of their shares.
Leading the litigants, in this case, is Mark Russell, a former Twitter shareholder. Russell said in a conversation with the media,
Elon Musk made a late announcement of his stake in Twitter, which allowed him to buy more Twitter shares at a lower price because if this news had come out earlier, the share price would have gone up. This is a fraud because some people like us had sold the shares at a low price. Musk has violated US law.
“I sold 35 of my Twitter shares for $1,373 between March 25 and 29. Accordingly, I got an average of $39.23 per share. But, if Elon Musk had given the information about buying the share on time, I could have gotten a higher price for the claim.
So has Musk broken the law?
According to US law, if a person buys 5 per cent of the shares of a company, then he has to inform the US Securities and Exchange Commission within ten days.
The people who sued Elon Musk say,
The Tesla CEO began buying Twitter shares in January 2022 and had purchased more than 5 per cent of Twitter’s shares as of March 14. He should have informed the Securities and Exchange Commission about buying Twitter shares by March 24. But Elon Musk made public about buying Twitter shares on April 4, 2022, when he purchased Twitter’s 9.2 per cent stake. After this, the share price of Twitter jumped by 27 per cent, and its price became $49.97.
Former Twitter shareholders who sued claim that Elon Musk’s late announcement to buy the shares was for his benefit, but it hurt those who sold their Twitter shares in the last week of March. All of them have appealed to the Manhattan Court to get Elon Musk compensated for the losses caused to them.
However, now let’s see what Elon Musk argues in the court on this matter and then what decision does the court take? For now, the legal team of Tesla CEO has said – ‘No Comment’.