Elon Musk Is In Litigation With Twitter Shareholders This Time

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Elon Musk, who announced that he bought 9.2% of Twitter for approximately 3 billion dollars last week, and then announced that he would join the board of directors and then give up, caught the eye of many investors because of these moves. One of these investors, Marc Bain Rasella, who owns a stake in Twitter, filed a somewhat justified complaint with the Federal Court of Manhattan yesterday.

Rasella, in her complaint requesting a jury trial against Musk, emphasized that Musk violated the legal deadline to announce the share purchase . In the complaint, it was stated that Musk earned approximately 143 million dollars more with this timeout. It was also stated that the complaint aims to represent all investors who sold Twitter shares between March 24 and April 1. Let’s take a look at the dimensions of this complaint and Musk’s purchase.

First of all, let’s remember Musk’s purchase:

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How many shares of Elon Musk when and for how much money (SEC)

Elon Musk announced to the US Securities and Exchange Commission (SEC) that he had purchased Twitter shares on April 4. In another document shared by the SEC, it could be seen how many shares Elon Musk bought from Twitter on which date. According to this document, Musk had purchased shares on 43 different days from January 31, 2021 to April 4 .

Musk was supposed to report his purchase, but did not:

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Elon Musk, % of Twitter shares under US law The owner of a 5 percent stake was required to notify the SEC within 10 days . But Elon Musk made this statement 11 days later. During the 11 days that passed, Elon Musk’s share had already increased from 5% to 9.2%. In other words, Musk continued to collect Twitter shares cheaply for 11 days.

To give you an idea of ​​how much Elon Musk is making with this tactic, let’s take a look at Twitter stocks’ journey since the beginning of the year. Share prices, which started the year at $42, hovered in the $43-$33 range between January 31st and April 4th, when Musk collected the shares. The region where the shares were most concentrated was 38 – 33 dollars . With the announcement on April 4, the share price of Twitter had exceeded $50 . Elon Musk had collected 73.5 million shares in total in 3 months…

In the aforementioned legal application, the investor generally considered those who sold their Twitter shares if Musk announced their shares on time. He complains that he hasn’t made a mistake . The bottom line is, the investor who made a loss by taking the wrong (perhaps right for the time) stake in Twitter stocks will also use Musk’s violation of the law as an opportunity to cover his losses . What kind of punishment is requested for Musk in the complaint has not been specified for the time being.

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