A new lawsuit has been filed against Elon Musk because of his relationship to Twitter. According to a document filed with the Securities and Exchange Commission on April 4, Musk, the world’s richest person, just bought a 9.2 percent share in the social media network Facebook. As a result, he has become the company’s biggest shareholder. According to Bloomberg, another Twitter stakeholder, Marc Bain Rasella, says that investors missed out on profits because Tesla CEO Elon Musk delayed too long to announce his huge acquisition of the company.
According to a copy of the court filings released by NPR, Rosella’s complaint, which was filed in Manhattan federal court on Tuesday, alleges that Musk was required to inform the Securities and Exchange Commission of his acquisition by March 24. Musk has not responded to the case. Rasella says that by delaying the announcement, Musk was able to purchase more shares at a reduced price, so denying other investors the opportunity to benefit. PEOPLE reached out to Musk’s representatives for comment but did not get a response right away.
Official court documents state that the lawsuit was brought on behalf of Twitter shareholders who sold their shares between March 24 and April 1, with the exception of Musk, his family, and connections. As the court documents explain, “when Musk finally filed the required Schedule 13, thereby disclosing his ownership stake in Twitter, the Company’s shares increased from a closing price of $39.31 per share on April 1, 2022, to a closing price of $49.97 per share on April 4, 2022 — an increase of approximately 27-percent.”
According to the lawsuit, Musk “knowing or intentionally ignored” his responsibility to inform the appropriate authorities.
Specifically, the lawsuit claims that Musk saved around $143 million on his Twitter acquisitions by delaying the filing of a necessary Schedule 13G/D and acquiring more shares at deflated prices, among other things.
He invested in Twitter after criticizing the firm of “failing to adhere to free speech” norms and after giving “serious consideration” to creating his own social media site. The software billionaire has more than 80 million Twitter followers.
Despite the fact that Musk is now Twitter’s biggest shareholder, he has opted not to join the company’s board of directors as a result of his investment. In a tweet, Twitter CEO Parag Agrawal said that “Elon’s nomination to the board was to become formally effective on 4/9, however, Elon revealed that same morning that he would no longer be joining the board.” “This is, in my opinion, for the best. We have valued and will continue to appreciate the input of our shareholders, whether or not they are members of our Board of Directors. Elon Musk is our largest shareholder, and we will continue to welcome his suggestions.”