SAN FRANCISCO (KRON) – A Twitter shareholder filed suit against Elon Musk in federal court for allegedly manipulating the market for Twitter stock, according to a press release from the Burlingame-based law firm Cotchett, Pitre & McCarthy, LLP.
“After first agreeing to buy Twitter for $54.20 per share on April 25, 2022, Musk began denigrating Twitter and then trying to renegotiate the deal,” the press release states. “Musk’s false statements and tweets have resulted in an $8 billion loss of market capitalization for Twitter shareholders, who are forced to go along for the ride and games.”
The suit, Heresniak v. Musk, was filed in the United States District Court for the Northern District of California in San Francisco late Wednesday. William Heresniak is suing on behalf of himself and other shareholders, the civil complaint states.
Attorneys representing the plaintiff come from the Burlingame-based firm and the La-Jolla based firm Bottini & Bottini, Inc. The plaintiff “owns shares of Twitter,” according to attorney Tyson Redenbarger with Cotchett, Pitre & McCarthy, though Redenbarger could not tell KRON4 how many as of press time.
In the complaint, the plaintiff’s attorneys allege that “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.”
If true, such conduct is illegal under the California Corporations Code, and is contrary to the terms he agreed to in the deal to buy Twitter. The company, headquartered in San Francisco, is estimated to have lost $8 billion in valuation since the buyout was announced, the complaint states.
“As alleged in the complaint, Musk’s disregard for securities laws demonstrates how billionaires can skirt the law and the tax code to build their wealth at the expense of the average American,” Anne Marie Murphy, a partner at the firm, stated in the press release.