Jakub Porzycki | Nurphoto | Getty Images A group of Twitter shareholders is suing Elon Musk for allegedly not revealing that he had bought a significant stake in the social media company at the right time. The CEO of Tesla and SpaceX revealed on April 4 that he had amassed a 9.2% stake in Twitter, causing shares to soar as investors viewed the move as a vote of confidence. But its revelation may have been too late. Federal commercial laws dictate that investors must notify the Hellenic Capital Market Commission within 10 days of acquiring more than 5% in a company. Musk, who began buying shares in Twitter in January, reportedly achieved this milestone on March 14, which means he should have informed the SEC by March 24. A spokesman for Musk, the world’s richest man, did not immediately respond to a request for comment. The lawsuit, filed in New York on Tuesday by law firm Block & Leviton on behalf of several Twitter shareholders, alleges that Musk was able to buy more Twitter shares at a deflated price between the 5% threshold and the public offering. disclosure of its percentage. . Half a dozen lawyers and securities experts told the Washington Post that the delay could have helped Musk earn $ 156 million. Shares of Twitter fell 27% on April 4, after it was revealed that Musk had accumulated a share of 9.2%, worth almost $ 3 billion. The lawsuit has been filed against investors who claim they lost out on potential gains they could have made if Musk had revealed his involvement earlier. What is clear is that Elon Musk missed the current 10-day submission deadline under Sections 13 (d) and 13 (g) of the Securities Act of 1933 to report 5% of ownership in a public company “, said Alon Kapen, a law firm dealing with Farrell Fritz, said in a statement to CNBC. “This gave him an additional 10 days to buy additional shares (he increased his ownership during this period by an additional 4.1%) before the per-share price spike that occurred when he finally announced his holdings on April 4.” , added Capen. Following the revelation of his Twitter account, Musk revealed that he also intended to take a seat on the company’s board of directors. However, for reasons that have not been announced, he decided not to take the seat.
