Elon Musk is facing yet another lawsuit in connection with his planned acquisition of Twitter. According to Reuters, investors have sued Tesla CEO Elon Musk for allegedly manipulating stock prices ahead of his $44 billion takeover bid.
Musk allegedly saved $156 million by failing to disclose that he had purchased more than a 5% stake in Twitter by March 14th, in violation of SEC rules. According to the investors, Musk only revealed his investments in early April, when he revealed that he owned 9.2 per cent of the social network.
The investors also claimed that Musk’s post-announcement statements amounted to manipulation. They were particularly concerned by his claim that the deal was “on hold” until Twitter could demonstrate that bots were not a major issue and accounted for less than 5% of accounts.
The plaintiffs in the case are seeking class action status and seeking unspecified damages if they are successful. Twitter declined to comment, and Musk did not respond to requests for comment from Reuters.
Musk’s hoped-for acquisition has already triggered a flurry of legal action. In addition to the April lawsuit, a Florida pension fund accused Musk of violating a Delaware law that would have barred the merger until 2025.
Meanwhile, the SEC is looking into Musk’s timing of disclosure. Although none of these actions is guaranteed to succeed, they do pose serious challenges to Musk’s ambitions.