Elon Musk's Twitter
"I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy," Musk wrote in a letter to Twitter's chair, Bret Taylor, that was included in the SEC filing. "However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form."
First, a tax filing with the Securities Exchange Commission (SEC) revealed Musk had purchased a 9.2% stake in the social media platform. Roughly a day later, Twitter announced that the world's richest man would be joining its board of directors, but that decision was quickly reversed, either by Musk or the Board, for unclear reasons.
Between the board announcement and subsequent reversal, Musk went on a spree posting statements critical of Twitter. In his statement on the matter, Twitter CEO Parag Agrawal said that Musk would have been brought on as a company fiduciary, meaning he would have been required to act in the company's best interest.
Now, Twitter shareholder Marc Bain Rasella has filed a class-action suit against Musk for failing to disclose his Twitter stock purchase within the timeline required by the SEC, a failure that allowed the billionaire to purchase stocks at a lower price than he otherwise would have. Experts told the Washington Post that this delay likely saved Musk around $156 million.
Under SEC rules, investors who purchase more than 5% of a company's stock must disclose their purchase within 10 days, something which Musk did not do. Rather than filing after reaching a 5% stake on March 14, Musk continued to accrue stock until he reached the 9.2% mark, finally filing his disclosure on April 4.
After Musk's 9.2% purchase was revealed, Twitter's share prices shot up around 27%. Rasella argues that if Musk had disclosed his 5% purchase by March 24 as required, the stock price would have increased prior to the remainder of his purchases. The plaintiff class, Twitter investors like Rasella who sold shares between March 24 and April 4, faced "artificially deflated prices, according to the suit.
Musk's most recent play has been a filing with the SEC requesting to purchase Twitter. He's offering $54,20 per share, a 54% premium over the company's stock price in January before Musk started buying stock.
"I don't have confidence in management," Musk said in the SEC filing. "Twitter has extraordinary potential. I will unlock it."
