Elon Musk and Twitter are being sued by a Twitter investor over the billionaire’s $44 billion (£34.9 billion) purchase of the firm.
He is accused of breaking California corporation regulations in a variety of ways, according to the lawsuit.
Mr. Musk’s $54.20 offer price for Twitter shares is roughly 27% cheaper. Investor William Heresniak filed the proposed class action complaint this week in the US District Court for the Northern District of California, claiming to be acting “on behalf of himself and all others similarly situated.”
A class-action lawsuit is one that has been filed or is being defended on behalf of a group of people.
According to the lawsuit, Mr Musk allegedly profited financially by delaying the disclosure of his considerable position on Twitter and his intention to join the company’s board of directors, which led to the lawsuit.
It contained a post in which Mr. Musk stated his offer for the social media company had been put on hold due to his concerns about the number of bogus accounts on the network.
According to Frank Bottini, one of the lawyers representing the Twitter investors, Mr. Musk “continues to trash the firm he wants to buy for $44 billion in an effort to renegotiate the purchase price.”
Analysts say Mr. Musk is considering decreasing his takeover price or walking away entirely from the transaction.
Mr. Musk has also intimated that he would try to get a better deal for Twitter than the $44 billion he and the board of directors agreed on in March.
Mr. Musk was an “interested shareholder” in Twitter, according to the Orlando Police Pension Fund, since he had made deals with important shareholders, including co-founder Jack Dorsey, before making an offer to buy the company.
The merger should not be allowed to close before 2025, according to the law in the US state of Delaware, where Twitter is based.
Although it stated that it had been “a beneficial owner of Twitter common shares” at “all relevant times,” the fund did not disclose its holdings on the social media site.