BURLINGAME, Calif.–(BUSINESS WIRE)–Cotchett, Pitre & McCarthy (www.cpmlegal.com), and Bottini & Bottini announce that they have filed a class action lawsuit against Elon Musk on behalf of all persons who sold the common stock and securities of TWITTER, Inc. ( NYSE: “TWTR”) at any time between May 13, 2022 and October 4, 2022 (the “Class Period”). The lawsuit, captioned Pampena v. Elon MuskCase No. 3:22-cv-05937, is pending in the United States District Court for the Northern District of California.
The lawsuit alleges that Elon Musk violated Section 10(b) of the Securities Exchange Act of 1934 by issuing false statements about his purchase of Twitter, Inc., including false claims that Twitter had breached the terms of the merger agreement. Among other things, the complaint alleges that, on May 13, 2022, Musk issued misleading tweets claiming that the merger was “temporarily on hold.” On May 17, 2022, Musk issued another tweet stating that the merger “cannot go forward” until Twitter showed him proof of the number of “fake accounts” on its platform. Thereafter, between July 8, 2022 and September 9, 2022, Musk issued three separate notices purporting to terminate the merger. The complaint alleges that these statements falsely claimed that Twitter had breached the terms of the merger agreement by, among other things, not giving him documents about spam and bots.
The complaint alleges that Musk’s statements were false because (1) Musk had waived due diligence under the merger agreement; (2) Musk was aware of issues relating to bots and spam on Twitter’s platform and had even vowed to eliminate the bots after he acquired Twitter; and (3) Musk did not have a justifiable reason to delay or terminate the merger. As alleged in the complaint, Musk was making these misleading statements in an attempt to get out of the deal, delay the merger with the intention that he might get a better price, or in the hopes that the price of Tesla stock would increase before he. was forced to sell his shares to fund the merger.
Then, on October 4, 2022, less than two weeks before Musk was set to go to trial in Delaware over the merger, Musk issued a statement indicating he would proceed with the purchase of Twitter at the original purchase price of $54.20 per share. The announcement shocked the stock market and caused the price of Twitter stock to increase by 22% in one day. However, as the complaint alleges, Twitter stockholders – who sold their Twitter stock based on Musk’s false statements about the merger – were damaged by selling Twitter stock at prices artificially depressed by Musk’s conduct.
If you have any questions regarding your rights related to this action or have information relevant to the claims asserted in the complaint, please contact Tyson Redenbarger of Cotchett, Pitre & McCarthy at (650) 697-6000 or [email protected].