Elon Musk Sued by Shareholders Over Delay in Disclosing His Stake in Twitter
The announcement came more than 10 days late, according to legal regulations.
Tesla CEO Elon Musk is now being sued by former Twitter shareholders for his delay in disclosing his stake in the company. According to reports, the shareholders claim that Musk and Twitter should have announced his 9.2% investment in the company much earlier than they had. U.S. securities laws require an announcement to be made within 10 days of the transaction for acquisitions of more than 5% stake, which means Musk would’ve had to announce it by March 24.
Instead, the billionaire and Twitter revealed the news on April 5, causing many former Twitter shareholders to lose on the 27% gain in stock price after selling shares early. The class-action lawsuit now claims that Musk made “materially false and misleading statements and omissions,” causing them to sell at “artificially deflated” prices.
Since becoming the largest shareholder in the social media platform, Musk has been invited to join its board of directors. However, the tech mogul declined the offer, giving him the capacity to continue accumulating shares in Twitter without being limited to a 14.9% stake as a board member.
Elsewhere in the tech industry, Meta is reportedly planning to launch its own augmented reality glasses by 2024.
