“Musk proceeded to make statements, send tweets, and engage in conduct designed to create doubt about the deal and drive Twitter’s stock down substantially in order to create leverage that Musk hoped to use to either back out of the purchase or re-negotiate the buyout price,” the lawsuit states.
Mr Heresniak is seeking to have the lawsuit designated as a class action, allowing other Twitter shareholders to join it, and for Mr Musk compensate the company’s shareholders for the declining value of their investment. The lawsuit demands that Twitter “investigate Musk’s conduct and take appropriate action”.
It also seeks damages from Mr Musk for failing to disclose his status as a Twitter investor earlier in March. The Tesla chief executive only revealed that he had purchased a 9.2pc stake in the company after the traditional deadline.
“By delaying his disclosure of his stake in Twitter, Musk engaged in market manipulation and bought Twitter stock at an artificially low price,” the lawsuit states.
Mr Musk said two weeks ago that the deal was “on hold” pending further information about the number of fake and spam accounts on Twitter. He has disputed the company’s figures saying less than 5pc of its users are illegitimate.
Earlier this week Mr Musk said more of the deal will be financed by purchasing Twitter shares, rather than through debt tied to his Tesla stake. He has not said how he plans to come up with the $33.5bn in financing needed for the deal.
Mr Musk and Twitter did not comment.
