American billionaire Elon Musk is facing a lawsuit after buying over 9% of shares in the social media company Twitter. Following the purchase, Musk became the largest outside shareholder in Twitter, and the stock price increased by more than 27%. Musk is now confronted with a lawsuit filed on behalf of investors who claimed that his delay in announcing the purchase of Twitter shares cost shareholders money and provided him with around $143 million in gains.
The court documents filed in New York state that Musk was required to notify the U.S. Securities and Exchange Commission within 10 days, by March 24, that he had acquired 5% of Twitter's shares. The lawsuit adds that Musk did not inform the commission until April 4, when he revealed that his stake had exceeded 9%. It notes that this delay allowed him to continue buying shares at lower prices before the announcement.
Musk has not yet commented on the lawsuit. Earlier, Twitter’s CEO Parag Agrawal stated that Elon Musk would not join Twitter’s board of directors, despite becoming the largest individual shareholder in the company. Agrawal wrote on Twitter: "Elon decided not to join our board. Elon’s appointment to the board was set to be official on April 9, but he announced on the same day that he would not join the board." He added that Twitter remains open to any proposals from Musk.
Twitter had announced Musk's appointment to its board just a day after announcing his new stake purchase, making him the largest shareholder with a 9.2% stake in the popular social media platform.
