In the United States any investor who acquires more than 5% of a company is required to notify the SEC (Securities and Exchange Commission), the regulator, within a maximum of ten days.
The purchase by the businessman was made on March 14, but was not reported until April 4. Elon Musk did it 21 days later.
With this in mind, attorney Jacob Walker filed a proposed class action lawsuit, arguing that Musk’s belated notice caused some Twitter shareholders to miss out on earnings of $10.66 per share.
Those affected sold their Twitter shares between March 24, when Musk hit the 5% threshold, and April 4, when he filed a belated notice with the SEC. This meant selling at a much lower price.
The remaining 4.2%, to reach the total number of shares that Musk currently owns (9.2%), he bought at a lower price, thereby taking advantage.
“When Musk finally filed the required Exhibit 13, thereby disclosing his involvement with Twitter, the company’s stock price rose from a closing price of $39.91/share on April 1, 2022 to $49.97/share on April 4, 2022. an increase of approximately 27%, reported in the request.
In particular, the lawsuit alleges that Musk saved about $143 million on his Twitter stock price.. “We are trying to correct this injustice by suing on behalf of the people who were selling during these six days,” adds the lawyer.
On the other hand, Musk’s documents may give the SEC new grounds for accusations of new securities violations. SEC rules require not only the above, also who disclose their intention to be passive or active shareholdersas it directly or indirectly affects the management or policies of the company.
Musk’s April 4 SEC filing showed that he acquired a 9.2% stake as a passive investor on Twitter and the next day, he submitted another application to change the role of a passive investor to an active one.
To this, we must add that he recently withdrew his consent to join the board of directors of Twitter.
It looks like this process will be quite hostile on Musk’s part, and shareholders are wary of big changes to Twitter that will have a negative impact.
Source: Computer Hoy
I am Bret Jackson, a professional journalist and author for Gadget Onus, where I specialize in writing about the gaming industry. With over 6 years of experience in my field, I have built up an extensive portfolio that ranges from reviews to interviews with top figures within the industry. My work has been featured on various news sites, providing readers with insightful analysis regarding the current state of gaming culture.
