Twitter investors sue Elon Musk over stock manipulation claims

It's the latest legal action around the proposed deal.

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PARIS, FRANCE - MAY 13: In this photo illustration, the Elon Musk’s Twitter account is displayed on the screen of an iPhone in front of a Twitter logo on May 13, 2022 in Paris, France. The U.S. multi-billionaire, Elon Musk indicated this Friday, May 13, to suspend the takeover of Twitter pending details on the proportion of fake accounts on the social network. Elon Musk bought the social network Twitter on Monday April 25 for the sum of 44 billion dollars. (Photo illustration by Chesnot/Getty Images)
Chesnot/Getty Images

Elon Musk is facing yet another lawsuit over his planned Twitter acquisition. Reuters reports investors have sued the Tesla CEO for allegedly manipulating stock prices ahead of his $44 billion takeover bid. As in an earlier suit, Musk supposedly saved $156 million by failing to disclose that he'd bought more than a 5 percent stake in Twitter by March 14th, violating SEC rules. The investors said Musk only disclosed his investments in early April, when he revealed that he owned a 9.2 percent slice of the social network.

Musk's post-announcement statements also amounted to manipulation, the investors said. They were particularly concerned about his claim that the deal was "on hold" until Twitter could prove that bots weren't a major problem and represented less than 5 percent of accounts.

The plaintiffs in the case are hoping for class action status, and ask for unspecified damages if they're successful. Twitter has declined comment, and Musk hadn't responded to Reuters' requests for comment.

Musk's hoped-for purchase has already sparked a flurry of legal action. In addition to the previously mentioned lawsuit from April, a Florida pension fund sued Musk for purportedly violating a Delaware law that would bar the merger until 2025. The SEC, meanwhile, is investigating Musk's disclosure timing. There's no certainty any of these actions will succeed, but they still pose serious challenges to Musk's ambitions.

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