Twitter shareholder sues Elon Musk for tanking the company’s stock

Illustration by Kristen Radtke / The Verge; Getty Images

A new lawsuit was filed against Musk in federal district court in San Francisco on Wednesday night, accusing him of manipulating the company's stock for personal gain.

The complaint focuses on Musk's conduct since signing the purchase agreement, particularly his recent statement that the deal cannot move forward without more information about automated accounts on the platform.

The complaint alleges that after signing the agreement, Musk proceeded to make statements, send statements, and engage in conduct designed to create doubt about the deal and drive the stock down.

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, according to the complaint.

A small group of shareholders brought a proposed class action that would seek damages for everyone who held the company's stock.

The case was not commented on by the social network.

While Musk's behavior is unusual, there has been no attempt from the CEO to change the deal. The complaint's claims are based on the unusual behavior of the stock, which continues to trade below the agreed-upon price. The market is skeptical that the deal will close as agreed, and that's reflected in the price of the shares.

The complaint asks for an injunction that could force Musk to pay the agreed-upon price for the company.

Musk had to abandon plans to secure financing through loans against his holdings in the company because of uncertainty around his public statements. Musk told the SEC earlier this week that he will provide an additional $6 billion in equity financing to make up for expired loans.