Elon Musk was sued by a Twitter Inc investor who says the world’s richest person’s on-again off-again purchase of the social media platform and his public attacks on the company were designed to manipulate its stock price.
Giuseppe Pampena says that when Musk agreed last week to go ahead with his purchase of Twitter, at the originally agreed-upon price, he “essentially acknowledged that he had been bluffing all along” about backing out of the deal.
The flip-flops and Musk’s accusations about Twitter sunk its stock price, hurting investors while all the while improving Musk’s bargaining position, according to the securities class-action complaint filed Monday in federal court in San Francisco.
Musk offered to buy Twitter in April for $54.20 per share, or $44 billion, but then announced he was pulling out of the deal three weeks later.
Then, “Musk proceeded to make statements, send tweets, and engage in conduct designed to create doubt about the deal and drive Twitter’s stock down substantially in order to create leverage that Musk hoped to use to either back out of the purchase or re-negotiate the buyout price by as much as 25% which, if accomplished, would result in an $11 billion reduction in the buyout consideration,” according to the suit. “Musk’s conduct was fraudulent and illegal.”
Musk has previously been sued at various points along the way in the Twitter buyout saga.
Representatives of Quinn Emanuel Urquhart & Sullivan LLP, the law firm that represents Musk in several legal matters including the Twitter buyout, didn’t immediately respond outside regular business hours to a request for comment.
The case is Pampena v. Musk, 22-cv-05937, U.S. District Court, Northern District of California (San Francisco).