Investors seek class action against Musk

Investors seek class action against Musk

Investor Action

Twitter investors are seeking class certification in a lawsuit against Elon Musk over his actions during his proposed buyout of the social media company. The lead plaintiffs claim they lost over $558,000 on stock sales due to Musk fueling uncertainty about the deal, which drove down Twitter’s stock price. The plaintiffs argue that class certification is appropriate because the class is sufficiently numerous, the lead plaintiffs are adequate representatives, and their claims are common to the class. They filed the motion in the US District Court for the Northern District of California.

The court had already allowed claims involving three statements made by Musk to proceed. This new motion seeks to formally bring together all affected investors into a single class for the litigation. If granted, the certification could impact thousands of investors who were affected by Musk’s actions and statements regarding the Twitter buyout.

Investors seek class certification

The proposed class counsel is considered well-qualified, and the plaintiffs assert that common questions of law and fact predominate, making a class action the most efficient way to resolve the dispute. Musk initially proposed the $44 billion buyout in April but later tried to withdraw, citing concerns over spam accounts on Twitter. This led to a public dispute and legal battle between Musk and Twitter’s board. Twitter’s legal team asserts that Musk violated multiple securities laws and is pressing the court to hold him accountable.

The board strongly opposes Musk’s actions, calling them “erratic and unlawful” and claiming he is using dubious claims about spam accounts as a pretext to exit a deal that has become economically unappealing. The court’s decision on class-action status will be crucial to the investors’ case, potentially allowing thousands of shareholders to seek damages collectively. Legal analysts are closely watching the proceedings, as the outcome could have significant implications for corporate buyout practices and securities litigation.

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