Twitter Investors Sue Elon Musk Over His Stock Purchase

A Twitter shareholder has filed a lawsuit against Elon Musk over his purchase of the company's stock which gave him a 9.2% share in the social media company. The lawsuit, which is seeking class-action certification, accuses Musk of failing to publicly disclose his purchase when it reached 5%.

Under federal law, investors must disclose their purchase within ten days of hitting the 5% threshold. Musk started purchasing Twitter's stock in January and reached that mark on March 14. While Musk was legally required to file paperwork by March 24, the billionaire didn't make his stock purchases public until April 4.

The announcement resulted in Twitter's stock jumping by 27%, earning Musk an estimated $156 million in additional gains because he was able to buy the remaining shares at a lower price.

The lawsuit says that Musk's failure to disclose his purchase resulted in investors who sold their stock before the announcement losing out on potential gains had he filed the paperwork on time.

After Musk announced his purchase, he was offered a seat on Twitter's Board of Directors. While he initially appeared to accept the position, the billionaire ultimately turned down the offer, sparking rumors that he may be considering a hostile takeover of the social media company.