Elon Musk’s deal to acquire Twitter was “temporarily put on hold”, causing the stock price and value of the company he chose to acquire. Raising concerns about possible securities fraud.
After a few hours hestill committed to the acquisition.”
With Twitter’s gigantic platform, Musk can rock the stock market with one sentence. A tweet that put the $44 billion promise to acquire Twitter “temporarily on hold” caused Twitter stock to drop 25% because Twitter could have more fake accounts and bots.
Musk himself decided to forgo due diligence before the proposal. Had he not done so, he would have thoroughly investigated the company. Friday night he tweeted that his “team” would do the research. 100 randomly selected twitter profiles I tried to verify that they were real and asked another user to do the same.
However, the time has passed for due diligence under his terms of the deal.
“‘‘Temporary hold’ is not the word.‘” Bloomberg columnist Matt Levine wrote on Friday. “Elon Musk binding contract Asked him to buy Twitter.” Levine said in a quarterly report last month that the company disclosed “The deal doesn’t allow Musk to step down if it turns out that ‘spam/fake accounts’ account for more than 5% of Twitter users.” “, he added.
When buying a company, Levine said, “You shouldn’t say anything that isn’t true and that could affect the stock of the public company you’re trying to buy.” “That’s what I call ‘brokerage scam’, or what I sometimes call ‘simple stock scam’. Musk has a long history of mild securities fraud.”
he is currently Sued for securities fraud by Twitter shareholders because he missed what was legally required Deadline to report by 10 days His stake in the company has risen to 5%. By hiding that information, he was able to continue buying the stock without rising prices triggered by interest. $143 million savingsAccording to the lawsuit.
SEC now investigate itThe Wall Street Journal reported Wednesday.
Current Twitter CEO Parag Agrawal was working to stabilize the boat on Friday and quell investor fears after Musk’s tweet. “We expect a deal to happen, but we have to be prepared for every scenario and always do the right thing on Twitter,” he tweeted.
Musk was not immediately available for comment.