Elon Musk has been sued in a recent lawsuit by a Twitter investor. The investor accused Musk of manipulating the market to aid him in reducing the transaction cost of his $44 billion Twitter acquisition.
The investor, William Heresniak, charged Musk with purposefully making market movements to lower stock prices. The current deal was said to be put on hold as Elon stated that he witnessed many spam accounts on the platform.
In the complaint, filed in the United States District Court for the Northern District of California, the plaintiff is seeking declaratory and injunctive relief.
Elon Musk puts the Twitter deal on hold
Elon Musk, the CEO of Tesla, stated that his $44 billion purchase of Twitter would be delayed until the social media behemoth could demonstrate that less than 5% of its users are spam.
The world’s richest man stated his buyout offer was based on Twitter’s SEC filing, which revealed that spam accounts accounted for less than 5% of daily active users. Musk, on the other hand, claimed that roughly 20% of the accounts on the network were bogus and that the number may be even higher.
“My offer was based on Twitter’s SEC filings being accurate. Yesterday, Twitter’s CEO publicly refused to show proof of <5%. This deal cannot move forward until he does”.
Twitter suspends more than half a million phony accounts per day, according to Parag Agrawal, and locks millions of others who fail to pass human verification requirements.
He went on to say that internal estimations from the last four quarters showed bot accounts accounted for less than 5% of the platform’s total daily active users. Still, that analysis couldn’t be repeated outside the company because users’ data had to be kept secret.
The recent charge by William Heresniak has not yet been proved, nor has any evidence been presented at the moment. Let us wait and watch to see how the charges against Elon Musk will end up as it progresses.