Elon Musk Sued by Twitter Shareholder for Not Disclosing Stake on Time

WASHINGTON (Sputnik) - Twitter shareholder Marc Bain Rasella has filed a lawsuit against US billionaire Elon Musk for not disclosing his stake in the company by the official deadline and thus purchasing shares at a lower price causing harm to other Twitter investors.

On 4 April, Musk said that he had acquired a 9.2% stake in Twitter, after which the microblogging company's shares jumped in price by 28% at pre-market trading sessions.

"Investors who sold shares of Twitter stock between March 24, 2022, when Musk was required to have disclosed his Twitter ownership, and before the actual April 4, 2022 disclosure, missed the resulting share price increase as the market reacted to Musk's purchases and were damaged thereby", the lawsuit, filed in a Manhattan federal court on Tuesday, reads.

According to the plaintiff, Musk began acquiring the shares of Twitter stock in January. By 14 March, he allegedly owned over 5%. The date, 14 March, was indicated by the US Securities and Exchange Commission as the deadline for the disclosure of Musk's stake in the company.

The billionaire was required to tell the commission that he had exceeded the 5% threshold within 10 days, that was, until 24 March. Instead, Musk continued buying shares of Twitter stock and provided the relevant information only on 4 April, when he already owned over 9%, the plaintiff said.

The lawsuit was filed on behalf of all investors who sold or otherwise disposed of Twitter securities between 24 March and 1 April.

The US company Twitter Inc. was founded in 2006. The firm's main product is a social network for exchanging short messages. Its headquarters is located in San Francisco, California.