One of the shareholders of Twitter Inc. filed a lawsuit against Elon Musk, stating that he and other investors suffered financial losses due to the fact that the billionaire did not disclose information about the purchase of company shares in a timely manner.
The lawsuit, filed by Mark Bain Rusella in the Southern District of New York, alleges that Elon Musk began buying shares in Twitter in January and brought his stake in the company to 5% in March, which required immediate notification of the Securities and Exchange Commission (SEC). He, however, did not reveal that he owns a stake in Twitter until April 4th. At that time, he already owned 9.2% of the company’s shares, writes The Wall Street Journal.
Mark Bain Rasella said he suffered a loss by selling shares of Twitter, which turned out to be artificially low, since Elon Musk was already a shareholder of Twitter at that time, but did not disclose information about this. In addition, delaying the disclosure of data, Elon Musk could buy Twitter shares at a reduced price, the investor believes.
Shares of Twitter soared by a record 27% after the news of the purchase of a stake in the company by the head of Tesla Inc. and SpaceX. Over the next five sessions, they fell by 13%. Mark Bain Rasella expects other investors who sold Twitter shares between March 24 and April 4 to join his lawsuit. “Plaintiff and other investors would not have sold Twitter shares at the price they sold them for if they knew that the value of the shares was artificially and wrongfully undervalued by defendant’s misleading statements,” the lawsuit says.
A few days before the SEC notification of his stake, Elon Musk wrote on Twitter that he was not happy with the approach of this social network to freedom of speech, and he was “seriously considering” the creation of a new platform.