Elon Musk’s bid to have a lawsuit dismissed which accuses him of driving down Twitter Inc (NYSE:TWTR)’s share price before he bought the social media platform has been denied.
Investors in Twitter - now known as X - have argued Musk attempted to depress the social media company’s share price before he purchased it for US$44 billion late last year.
They suffered losses as a result, the plaintiffs claim, with U.S. District Judge Charles Breyer on Monday allowing the case around alleged false or misleading statements from Musk to advance.
Although Musk successfully had some of the investors’ claims thrown out, his comments over his takeover bid being “on hold” remain in the case.
Musk had claimed the deal was delayed after he discovered many of the accounts registered on Twitter were “spam” and “fake” profiles.
“Because Twitter did not have an obligation to provide this data to [the] defendant under the terms of the merger agreement, [the] defendant’s representation that Twitter did have this obligation in order for the deal to close was false,” Breyer said in an order.
Shares in Twitter did indeed decrease, falling from $71.69 in July 2021 to $43.42 in March 2022, prior to the deal going through.