A proposed class-action lawsuit against Elon Musk and his family office Excession can proceed in federal court, a judge ruled Friday.

Summary

A federal judge ruled that a class-action lawsuit against Elon Musk over alleged securities fraud can proceed.

Former Twitter shareholders claim Musk failed to disclose his stock purchases in a timely manner, causing them to sell at artificially low prices.

The judge noted Musk’s March 2022 tweet suggesting interest in buying another social network as misleading. Musk’s lawyers argue the late disclosure was an error.

The SEC has filed a similar suit. Musk acquired Twitter for $44 billion in 2022 and recently merged xAI with the platform.

  • Xanthobilly@lemmy.world
    20·
    2 days ago

    This is likely one of the reasons to sell X to xAI. He can destroy evidence associated with this lawsuit.

    • Rentlar@lemmy.ca
      2·
      2 days ago

      If plaintiffs can manage to get this private sale of x to xAI proven in court as intended to hamper this suit, could the judge then proceed to pierce the corporate veil on Musk for his malicious actions?

  • peoplebeproblems@midwest.socialEnglish
    11·
    2 days ago

    This is weird to me. Something doesn’t add up with all of this.

    The SEC suit mentioned something like ~$150m which ended being like 19¢ a share. That is small enough to easily be an error. But Musk bought it for $54.20/share, so the price “would have been” $54.39/share.

    In a takeover bid, the offer is usually a direct offer to senior management/board as the largest shareholders. We know that they attempted a poison pill (basically it allows existing shareholders to purchase new shares at a discount, effectively diluting the ownership percent and driving the takeover bid price up). But that’s where it gets murky.

    There either wasn’t enough interest in Twitter for the poison pill, or something else we don’t know changed the mind of the board to sell it to Musk.

    What I don’t get is how Musk managed complete ownership at the price of $54.20. Was there not a single shareholder that didn’t want to sell? Did the poison pill purposely scrap the shareholder rights of shareholders forcing them to all sell?

    Who fucked up? Did Musk really try to save 0.3% on purchase of a company? Did the board and management agree that it was a sinking ship anyway and used the poison pill to abandon ship?

    Who profited from the sale? Certainly not Musk, it was valued 65% lower in 2023. He also bought it for the propaganda tool it was. We know that.

    What is it that we aren’t seeing? They aren’t saying? What really transpired in the bid?