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Twitter shareholders lawsuit accuses Elon Musk of manipulating share prices

Twitter shareholders lawsuit accuses Elon Musk of manipulating share prices
Elon Musk arrives on the red carpet for the Met Gala at the Metropolitan Museum of Art in New York City on May 2. A lawsuit accuses him of attempting to manipulate Twitter share prices. Photo by John Angelillo/UPI | License Photo

May 26 (UPI) -- A group of shareholders have sued Twitter and Elon Musk, saying the SpaceX and Tesla CEO has sought to influence stock prices amid an attempt to buy the San Francisco-based company.

The class-action lawsuit, filed Wednesday in federal court in California, accused Musk of actively manipulating Twitter's stock prices, causing volatile swings.

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Musk revealed in early April that he owned 73.48 million shares of Twitter worth $2.9 billion, making him the single largest shareholder of the company. Less than a month later, the social media platform's board accepted Musk's $44 billion offer to purchase the company and take it private.

Since his offer to purchase the company, Twitter's shares have dropped more than 12% and Tesla's have dropped 40% since his ownership of Twitter shares became public, according to CNBC.

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The lawsuit took issue with Musk's statements earlier this month saying the acquisition deal won't go further until he knows how many phony or spam accounts are on Twitter.

"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 either back out of the purchase or re-negotiate the buyout price," the lawsuit says.

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"As detailed herein, Musk's conduct was and continues to be illegal, in violation of the California Corporations Code and contrary to the contractual terms he agreed to in the deal."

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