Elon Musk’s massive Twitter investment took a new turn on Tuesday, with the filing of a lawsuit alleging that the colourful entrepreneur illegally delayed revealing his ownership in the social media platform in order to purchase additional shares at lower rates.
The case, filed in federal court in New York, accuses Musk of failing to meet a regulatory deadline for disclosing a holding of at least 5% in Tesla. According to the lawsuit, Musk did not declare his position on Twitter until he had nearly increased his ownership to more than 9%.
The complaint claims that Musk’s plan harmed less wealthy investors who sold shares in the San Francisco business in the almost two weeks before Musk admitted to owning a significant position.
According to regulatory filings, Musk purchased a little more than 620,000 shares at USD 36.83 per on Jan. 31 and then continued to amass additional shares on practically every trading day through April 1. Elon Musk, best known as the CEO of the electric vehicle company Tesla, had 73.1 million Twitter shares as of Monday’s count. This equates to a 9.1% ownership in Twitter.
According to the complaint, Elon Musk’s interest in Twitter had hit a 5 percent threshold by March 14, requiring him to publicly report his ownership under US Securities law by March 24. Musk waited until April 4 to make the obligatory disclosure.
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