FX.co ★ Twitter shareholder sues Elon Musk over late disclosure of share acquisition

Elon Musk’s recent investment in Twitter resulted in a lawsuit. A Twitter shareholder has sued the CEO of Tesla and SpaceX, alleging that he has violated the securities regulation when taking a stake in the social network. The plaintiff argues that Musk had acquired more than a 5% stake in Twitter by March 14, which required him to file a form on reaching a 5% threshold with the US Securities and Exchange Commission within 10 days, that is, by March 24. However, the world’s richest man did not make the required disclosure until April 4. By that time, his stake in the company had gone up to 9%. The shareholder explains that Musk’s failure to disclose his ownership on time deprived investors of the chance to make significant gains. In fact, after the revelation, Twitter stock jumped in price. This means that investors who sold their shares between March 24 and April 4 lost profit. Earlier, the billionaire announced he was not going to join Twitter’s board of directors, which sent the stock plummeting by 7% to $42.7. On April 4, Musk revealed that he took a 9.2% stake in Twitter worth $2.89 billion. Amid this news, the stock of the social media platform soared by 26% to $49.25 per share.