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Twitter shareholders file lawsuit against Elon Musk

Document Cited in Related
Vincent
Published date26 May 2022
Publication titleBirmingham Mail: Web Edition Articles (England)
The lawsuit claims the billionaire Tesla CEO has sought to drive down Twitter's stock price because he wants to walk away from the deal or negotiate a substantially lower purchase price. Musk said the deal cannot go forward until the company provides information about how many accounts on the platform are spam or bots

San Francisco-based Twitter is named as a defendant in the lawsuit, which has been filed in the US District Court for the Northern District of California. It seeks class-action status as well as compensation for damages.

Read more Instagram users warned popular story trend could get them banned

The lawsuit notes, however, that Musk waived due diligence for his "take it or leave it" offer to buy Twitter. That means he waived his right to look at the company's non-public finances.

In addition, the problem of bots and fake accounts on Twitter is nothing new. The company paid 809.5 million dollars £641m last year to settle claims it was overstating its growth rate and monthly user figures.

Twitter has also disclosed its bot estimates to the Securities and Exchange Commission for years while also cautioning that its estimate might be too low.

To fund some of the acquisition, Musk has been selling Tesla stock, and shares in the electric carmaker have lost nearly a third of their value since the deal was announced on April 25. In response to the plunging value of Tesla's shares, the Twitter shareholders' lawsuit claims Musk has been denigrating Twitter, violating both the non-disparagement and...

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