Musk sued by investor over Twitter U-turn
ELON MUSK has been accused of using “lame rationales” to justify abandoning a $44bn (£36bn) takeover of Twitter in a lawsuit launched by an investor trying to ram the deal through.
The proposed class action lawsuit, filed in the same court as Twitter’s own case against the billionaire, has been brought by Luigi Crispo, who owns a $225,000 stake in Twitter, just under a thousandth of the company’s total shares. It alleges that Mr Musk came up with “lame rationales for reneging on his contract” to buy Twitter after the Tesla chief executive suggested that he had concerns about the number of spam accounts.
The social media company’s bosses have publicly stated that around 5pc of accounts on the social media service are fakes. Mr Musk says the true figure is nearer 20pc, with severe implications for Twitter’s potential advertising revenues.
Despite offering Mr Musk access to a “firehose” feed of new tweets posted in real time, Twitter management has not shared how it reached the 5pc figure.
Mr Crispo’s case joins a previously filed suit from May alleging Mr Musk deliberately tried to drive down Twitter’s share price in the hope of cutting the price tag.
Public filings with the US Securities and Exchange Commission revealed Mr Musk had secured $33.5bn in financing commitments before he declared that the deal was off.
Twitter closed Friday trading at $41.60, its highest since the point when Mr Musk first stated that the $54.20-pershare buyout was “on hold”.
Mr Musk himself filed a countersuit against Twitter on Friday, Reuters reported.
Details of that 164-page claim remain under judicial seal. The Delaware Chancery Court ordered a one-week trial of Twitter’s claim to begin on Oct 17 this year.
Investors in Tesla feared running Twitter would distract Mr Musk from the electric carmaker, reflected in its share price dropping until he said he was terminating the deal on July 9.