Legal troubles for Elon Musk are compounding as he looks to back out of the $44 billion deal to buy Twitter. The social network giant has already sued the Tesla CEO alleging that he wrongfully broke the agreement. Now, a Twitter investor has hit the billionaire with a proposed class action lawsuit, joining the company in trying to force him to buy the company.
Twitter investor joins the company against Elon Musk
According to Bloomberg, investor Luigi Crispo has filed the lawsuit in Delaware Chancery Court, the same court where Twitter has filed its case. The suit states Musk offered “lame rationales for reneging on his contract”. It refers to his claims that Twitter wrongly reported the proportion of fake or bot accounts on the platform.
Twitter has long maintained that less than five percent of its monetizable users are fake accounts. But Musk contended that this figure is incorrect. He repeatedly threatened to back out of the deal if the company doesn’t share more information on the methodology of counting the fake accounts. It appears he never received a satisfactory response. After several weeks of a public spat, Musk formally began proceeding to terminate the deal he signed a few months back.
Of course, Twitter wouldn’t let him walk away just like that. The company expectedly sued him soon after. The social media giant is seeking a court order compelling the Tesla CEO to complete the buyout. An irked investor has now joined it. In addition to Musk, Crispo has also reportedly named two “corporate acquisition entities” as defendants.
The new report mentions that Crispo holds 5,500 Twitter shares. At Musk’s offer price ($54.20 per share), those would have been worth nearly $300,000. But as of this writing, Twitter is trading at a far lesser value of $40.89 per share. Crispo’s shares are worth just over $224,000 at this price. No wonder they are seeking a court order that would force the high-profile privatization of the social media company.
The court proceedings will begin in October
Elon Musk last week formally answered Twitter’s suit. While his counter filing remains sealed, a court has granted Twitter’s request for an expedited trial even as Musk tried to push it as far back as possible. The court proceedings will begin on October 17th and will last for five days. The company’s shareholders are scheduled to vote on the proposed sale on September 13th. It will be interesting to see how this saga ends. We will keep you posted with all the latest information.