Former Twitter shareholders have filed a class-action lawsuit against Elon Musk, alleging that he did not legally disclose his holdings in the company - a move that would have increased the value of their shares when they sold them.
Under U.S. law, any buyer over 5 percent of a company’s stock must advertise his purchase within 10 days.
Musk and Twitter revealed the fact that the capital tycoon owned 9.2 percent of the company’s stock only on April 4 this year, and not at the time of the March 24 acquisition.
The plaintiffs allege that on the day Musk's expression of trust was revealed on Twitter, the company's shares rose 27 percent - from a price of $ 39.31 to $ 49.97, a handsome profit for all shareholders in the company.
Such a move would have happened anyway if Musk had legally disclosed the purchase earlier, thus making them earn more when they sold their shares.
Beyond that, the plaintiffs emphasize that the passage of the law - that is, the non-disclosure of Musk's interest in the company and the very fact that he held five percent of its shares, allowed him to purchase shares at a lower value than would have happened had he been exposed.
One of the main plaintiffs, Mark Russella, revealed that between March 25 and 29, he held 35 shares of Twitter that he sold for $ 1,373.
He said he could have earned more if the ownership of Elon Musk had been published.
The plaintiffs did not specify the amount of the fine they are demanding, but demanded punitive damages.
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