Elon Musk Is Under Investigation for Twitter’s Buyout; Co-founder Jack Dorsey Declines To Be CEO Again

Elon Musk is now under investigation after a lawsuit was filed against him in New York. The lawsuit is about his Twitter acquisition that was not entirely transparent to the public.

Musk's buying of small pieces of Twitter's stake allowed him to buy parts of the company at a lower price. However, this also aggravated other Twitter investors.

Elon Musk's Lawsuit for Buying Twitter

After Elon Musk bought 9.2% of Twitter's stake on April 4, Twitter CEO Parag Agrawal announced his invitation to Musk to join the company's board.

At first, Musk agreed to join the board of the company. However, he quickly took it back as this move would restrict him to owning just 15% of Twitter.

Marc Bain Rasella, a Twitter shareholder, filed a complaint against Tesla CEO Elon Musk on April 12, saying that Musk manipulated Twitter's share price by postponing a disclosure that he had purchased more than 5% ownership in the company until March 14, violating SEC rules in the process.

Since January 31, Elon Musk has been buying Twitter shares in practically daily batches.

Elon Musk has acquired more than a 5% stake in Twitter by March 14. This will force Musk to submit a Schedule 13 form with the United States Securities and Exchange Commission within 10 days of acquiring the stake, which will file the case in the United States District Court for the Southern District of New York.

According to the complaint, Musk's failure to submit the mandatory notification within 10 days of purchasing a stake in Twitter, allowed him to purchase additional shares at a lower price than he would have otherwise.

According to the lawsuit, he defrauded shareholders who sold their stock while he was in charge. As a result, Musk was able to acquire shares at a lower cost during the class period as a result of his inability to disclose his ownership stake in Twitter through Schedule 13.

On April 14, Musk made a proposal to purchase Twitter, and on April 25, the firm accepted his offer to do so. As Business Insider mentioned, despite facing a lawsuit under the SEC, this would not prevent Musk's acquisition of Twitter from being hindered.

Jack Dorsey Declines Being CEO Again

Jack Dorsey, the co-founder and the CEO of Twitter for the past few years, has been consistently vocal on his platform about the approval he has for Elon Musk. Dorsey stepped down as Twitter CEO last November, appointing a long-time employee of the platform, Parag Agrawal, as the new CEO. Dorsey assumed Twitter's executive position back in 2015 after remaining a board member for a long time.

However, as reported by The Verge, a recent tweet from Charles Weiand stated that he predicts Dorsey to be back on Twitter as CEO, "I predict that @elonmusk will eventually just ask @Jack to be CEO of Twitter."

And he then replied, stating he would never be CEO again.

Following that reply, another Twitter user asked the co-founder if he would like to. Dorsey then repeated it again and declined, saying "it's time to roll the dice again."

Dorsey has been pretty vocal about his company not having been owned by a single corporation or owner. He reasoned that Twitter is for the public good at a protocol level. Dorsey stated, "In principle, I don't believe anyone should own or run Twitter. It wants to be a public good at a protocol level, not a company."