By: Natasha Archary
Elon Musk’s Twitter takeover may land him in hot water, as an investor files a class-action lawsuit, suing the billionaire for market manipulation.
Accusing Musk of running down Twitter’s share price to reduce or not pay the $44 billion that was agreed upon in the deal.
In April, Musk successfully secured his bid to purchase Twitter for $44 billion (R690 billion). He has now been accused of driving down Twitter stock price by making statements and tweeting for his benefit.
The lawsuit alleges that Musk drove down the stocks to work in his favour and it worked because Twitter’s market value dropped by $8 billion (R124.6 billion).
With Tesla’s stock plummeting, Twitter investors are adamant that Musk’s actions were tactical in order to have him either pay less in the Twitter takeover deal or back out of it without penalties.
According to Bloomberg, Musk lost $11.1 billion in one day, when Tesla’s share price feel by 5.4% to $193 billion.
This means Musk is no longer part of the $200 billion club and could be financially burdened by the huge Twitter deal.
With most of his wealth tied up in Tesla, accusations of market manipulation arise from Musk tweeting that the Twitter deal was “temporarily on hold.”
— Elon Musk (@elonmusk) May 28, 2022
Twitter shares are around 27% lower than Mr Musk’s $54.20 offer price.
The lawsuit was filed on Wednesday by a shareholder who is acting on behalf of a group of investors and seeks to award shareholders any damages allowed by law.
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