Elon Musk, the man of many talents, including launching rockets, electrifying cars, and tweeting up a storm, is now facing a Twitter takeover lawsuit that has gained some serious steam. Judge Charles Breyer, who is not related to Mark, has advanced the claims of investors who say they suffered losses due to Musk’s tweets about the platform having a major issue with fake accounts.
It all started when Musk negotiated a buyout of Twitter, but then tried to pull a fast one by deploying some scorched earth tactics in an attempt to lower the $44 billion acquisition price. I guess you could say he wanted a Twitter bargain deal, but things got a bit messy when investors claimed that Musk’s tweets caused the company’s stock to drop significantly. The suit argues that Musk was trying to back out of the deal or renegotiate the price. What a Musk-y situation!
But wait, it gets better. Musk pledged his Tesla stock as collateral for a $12.5 billion loan to finance the deal, and when the stock declined, he was facing a potential margin call. It seems he was trying to wiggle out of the deal by making allegedly false statements about Twitter’s fake account problem. The judge even found that some of Musk’s claims were false or misleading. I guess you could say the truth is starting to Musk out.
One of Musk’s tweets led investors to believe that the merger was contingent on Twitter providing documentation supporting the calculation that spam and fake accounts accounted for less than 5% of users. However, the judge called out Musk’s argument, saying that Twitter didn’t have an obligation to provide this data to him under the terms of the Merger Agreement. Ouch, that’s gotta sting.
But it doesn’t end there. Musk also faces a lawsuit from investors who sold their shares in the 11 days that Musk was late in notifying financial regulators about acquiring a considerable stake in the company. They claim that Musk’s omission saved him roughly $143 million, while they missed out on significant profits when shares skyrocketed after the news broke. It looks like Musk’s Twitter antics might have cost him a pretty penny.
In addition to the Twitter takeover lawsuit, Musk also faced claims over his failure to notify regulators of his ownership stake in the company. According to the Securities Exchange Act, Musk was required to notify regulators within 10 days of passing a 5% ownership threshold. However, he continued to acquire shares and only filed the required disclosures after acquiring 9.1% of the company. Musk might need a crash course in Securities Exchange 101.
So, it seems that Musk’s Twitter takeover has become quite the legal saga. Will he be able to tweet his way out of this mess, or will the judge rule against him? Only time will tell. But one thing’s for sure, with Musk involved, it’s bound to be an electrifying courtroom drama. Stay tuned for the next episode of “The Musk Tweets Strikes Back.” Who knew that 280 characters could cause so much trouble?
