A Twitter shareholder sued Elon Musk for waiting too long to disclose his 9.2% stake in the social media platform.
Marc Bain Rasella filed the lawsuit Tuesday in Manhattan’s federal court, alleging the Tesla and SpaceX CEO “artificially deflated prices” for those selling shares. Musk was required to disclose his stake in Twitter to the Securities and Exchange Commission by March 24 but did not do so until April 4.
“When Musk finally filed the required Schedule 13, thereby revealing his ownership stake in Twitter, the Company’s shares rose from a closing price of $39.31 per share on April 1, 2022, to close at $49.97 per share on April 4, 2022 — an increase of approximately 27%,” the lawsuit, obtained by the Washington Examiner, states.
The suit claims Musk’s lack of filing led investors who sold shares of Twitter stock between March 24 and April 4 to miss out on price increases as the market reacted to Musk’s new ownership.
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“Furthermore, Defendant Musk saved approximately $143 million on his Twitter purchases by delaying the filing,” the lawsuit claims.
Rasella hopes the suit, which seeks an unspecified amount in compensatory and punitive damages, will be certified as a class action representing all Twitter shareholders who sold shares between March 24 and April 4.
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It is the latest development in Musk’s battle with Twitter after the billionaire CEO, who is openly critical of its handling of speech and censorship, became the platform’s largest shareholder. Musk initially planned to become a member of the company’s board, a decision he later reversed.
Musk has not publicly commented on the suit.
