Filed in a New York federal court on Tuesday, the suit seeks class action status on behalf of investors who sold Twitter stock during that time and lost out on gains they would have realized had Musk disclosed his stake earlier.
After Musk disclosed his stake, Twitter shares rose 27% – from $39.31 to $49.97. The plaintiff in the suit sold 35 Twitter shares for $1,373, or an average price of $39.23, before Musk revealed his investmentsJeffrey Block, of the law firm representing the plaintiff, confirmed the suit had been filed as of Tuesday. The lawsuit seeks a jury trial for unspecified compensatory and punitive damages. Musk did not immediately respond to a request for comment.
The SEC did not immediately respond to a request for comment regarding whether it would also take action against Musk. Musk’s announcement that he had acquired a 9.2% stake – making him the company’s largest shareholder at the time - caused immediate controversy. Many speculated the acquisition could allow Musk, a vocal critic of Twitter, to push the company to make broader changes.
Twitter announced on 5 April that Musk would join its board of directors, but on Sunday, Twitter’s CEO, Parag Agrawal, announced abruptly that MuskBy not joining the board, Musk, a prolific Twitter user, can keep buying shares without being bound by his agreement with the company to limit his stake to 14.9%. After the news of the U-turn broke, Musk tweeted and then deleted a hand-over-mouth emoji.
Elon is a simple guy i hope he can sort this out