TWTR

Twitter Inc

Court:

Motion Deadline: 
Monday, December 12, 2022
Summary: 

Bottini & Bottini and Cotchett Pitre & McCarthy have filed a lawsuit against Elon Musk and on behalf of all persons who SOLD Twitter securities at any time between May 13, 2022 and October 4, 2022, inclusive (the Class Period). A copy of the complaint is contained above under the "Complaint" tab. By Order dated April 24, 2023, the Hon. Charles Breyer appointed Bottini & Bottini and Cotchett Pitre & McCarthy as Lead Counsel for Plaintiffs and the Class.

On June 8, 2023, Plaintiffs filed a First Amended Complaint, a copy of which can be viewed by clicking on the "Complaint" tab.

Plaintiff's Complaint alleges that, after first agreeing to buy Twitter for $54.20 per share on April 25, 2022, Musk began denigrating Twitter and then trying to renegotiate the deal. Musk’s false statements and tweets have caused Twitter securities to substantially decline in value, resulting in an $8 billion loss of market capitalization. Twitter stock and bondholders who sold their securities while the prices were artificially depressed as a result of the fraud of Mr. Musk have been damaged and have the right to pursue damages against him.

The lawsuit alleges that Musk engaged in a series of intentional acts that harmed investors. First, Musk violated securities law by failing to timely disclose his increasing ownership of Twitter. He secretly amassed more than 5% of Twitter shares starting in January 2022 without disclosing it publicly, as he was required to by SEC rules. When Musk eventually got around to it, he purposely left out his intention to join Twitter’s Board or potentially buy the company outright. Musk then issued an ultimatum letter offering to buy Twitter for $54.20 per share or Musk would sell his 9.2% stock in Twitter. On April 25, 2022, Musk and Twitter announced the buyout without all the details or prior misconduct by Musk.

Musk pledged his Tesla shares as collateral for $12.5 billion in loans to finance part of the purchase price. Musk also initially sold roughly $8.5 billion of Tesla shares to raise funds for the buyout. But then Tesla shares began a steep decline that did not abate, dropping 37% after the announcement of the buyout, causing Musk to stop selling his shares. Musk is on the hook for billions more to complete this buyout both from his own cash and lenders. Tesla’s policies limit Musk’s ability to pledge his Tesla shares as collateral for personal loans to no more than 25% of the loan value, which threshold was breached as Tesla shares continued to plummet.

The lawsuit alleges that Musk came up with a plan to extricate himself from this dilemma by making false public statements about Twitter and the buyout to lower the price of Twitter shares. Musk made a series of these false statements that created leverage for himself to renegotiate or back out of the buyout by purposely casting doubt on whether the Twitter deal would go forward.

As alleged in the complaint, on May 13, 2022, just before the market opened, Musk tweeted that the buyout was “temporarily on hold” to manipulate the market. The buyout was not on hold and there is no provision in the contract that allows Musk to unilaterally put the deal on hold.

Musk then stated in a series of tweets that the buyout would be contingent on the number of fake accounts on Twitter. His tweets escalated and Musk later tweeted that the deal “cannot go forward” unless Musk was satisfied. Musk had no right to cancel the buyout or conduct an investigation into the number of fake accounts because Musk waived due diligence in the buyout contract. Musk was also well aware that Twitter had a certain amount of “fake accounts” and accounts controlled by “bots.” Musk also issued three separate letters stating that he had terminated the Twitter buyout. The value of Twitter stock declined substantially due to this fraud. But then Musk engaged in an abrupt about face on October 4, 2022, less than two weeks before trial was set to begin in Delaware in a case Twitter had filed to force Musk to go through with the buyout. Musk shocked the market on that date by announcing he was abandoning his meritless prior statements and that he would go through with the buyout on the original terms, including the $54.20 price per share. This unexpected news caused Twitter stock to skyrocket by 22% in one day, thus damaging Twitter stock and bondholders who had sold their securities in the weeks and months prior.

According to the lawsuit, Musk’s statements and conduct violated the anti-fraud provisions of the federal securities laws, which prohibit false statements and market manipulation. Specifically, the lawsuit alleges that Musk purposefully manipulated Twitter securities to lower their value. The lawsuit alleges that Musk’s sudden interest in fake accounts was a pretext to back out of the buyout or further lower the $54.20 buyout price.

Company Name:

Stock Symbol:

Date Filed: 
Monday, October 10, 2022
Retention Agreement: 

This Retention Agreement governs the retention of Bottini & Bottini, Inc. (the “Attorneys”) by those institutions or individuals (the “Client”) who have authorized the Attorneys to prosecute claims arising out of their sale of Twitter Inc's stock.
WHEREAS the Client has authorized the Attorneys to prosecute claims relating to the securities of Twitter Inc (the “Litigation”);
WHEREAS the Litigation entails numerous complex factual and legal issues and entails considerable risk;
WHEREAS the Litigation requires the expenditure of substantial resources by the Attorneys retained to prosecute the Litigation;
WHEREAS the Client seeks to maximize their recovery while limiting the expenditure of their own resources; and
NOW, THEREFORE, the Client and the Attorneys AGREE AS FOLLOWS:
I. SCOPE OF SERVICES/CASE HANDLING
A. Upon execution by Client, Attorneys are retained to provide legal services for the purpose of seeking damages and other relief in the Litigation. Client provides authorization to seek appointment as Lead Plaintiff in the class action, while the Attorneys will seek to be appointed Class Counsel. If this occurs, the Litigation will be prosecuted as a class action.
B. Attorneys are authorized to prosecute the Litigation. The appointed Lead Plaintiffs will monitor, review and participate with counsel in the prosecution of the Litigation. The Attorneys shall consult with the appointed Lead Plaintiffs concerning all major substantive matters related to the Litigation, including, but not limited to, the complaint, dispositive motions and settlement. Because of potential differences of opinion between Clients concerning, among other things, strategy, goals and objectives of the Litigation, the Attorneys shall consult with the appointed Lead Plaintiffs as to the courses of action to pursue. The Client agrees to abide by the decisions of the appointed Lead Plaintiffs, which shall be final and binding on all Clients.
C. The Attorneys shall provide sufficient resources, including attorney time and capital for payment of costs and expenses, to vigorously prosecute the Litigation.
D. Any recovery will be divided among Clients based on the recognized loss by each Client as calculated by a damage allocation plan which will be prepared by a financial expert, provided to the appointed Lead Plaintiffs, be subject to the Court's approval and will account for such factors as size of stock ownership, date of purchase, date of sale and continued holdings, if any.
II. CONTINGENT FEE AGREEMENT
A. The Attorneys shall advance all expenses in the Litigation. The Client is not liable to pay any of the expenses of the Litigation, whether attorneys' fees or costs. Recovery of costs and other expenses is contingent upon a recovery being obtained. If no recovery is obtained, Client will owe nothing for costs and other expenses. In the event that an order is entered awarding costs and expenses in favor of defendants, Attorneys will be responsible for such costs and expenses, not the Client.
B. If there is a recovery in the Litigation, whether by settlement or judgment, the Attorneys shall be compensated via payment of a reasonable percentage of any recovery as approved by the Court, which amount shall include attorneys’ fees plus reasonable disbursements in the Litigation. “Disbursements” shall include, but not be limited to, costs of travel, telephone, copying, fax transmission, depositions, investigators, messengers, mediation expenses, computer research fees, court fees, expert fees, other consultation fees and paralegal expenses. Any recovery in the Litigation shall first be used to reimburse disbursements.
C. In the event that the Litigation is resolved by settlement under terms involving any “in-kind” payment, such as stock, the contingent fee agreement shall apply to such “in-kind” payment.
III. GENERAL REQUIREMENTS
A. This Agreement may not be assigned by the Attorneys.
B. Client agrees to cooperate in the prosecution of the suit including providing documents to substantiate the Client's claim, and to cooperate in providing discovery information, including a deposition if necessary.
C. Client recognizes that the Attorneys are representing other Twitter Inc investors in the Litigation. The Client agrees that any conflicts caused by such representation are waived.
IV. TERMINATION
A. Client may terminate this Agreement as to any Attorneys, with or without cause and without penalty, by providing the Attorneys with written notice of termination. Attorneys may terminate this agreement with or without cause and without penalty, by providing client with written notice of termination if the Client fails to cooperate in the prosecution of this action or such other reason as may be approved upon application to the Court.
B. If the Attorneys are terminated for any reason, Attorneys shall be entitled (a) to be reimbursed, pursuant to §II above, for reasonable out-of-pocket costs and expenses that they incurred, but only if and when recovery is obtained, and (b) to be paid such compensation as might be payable to them in accordance with this Agreement, but only if and to the extent and at the time compensation is payable to the Attorneys from any recovery in the Litigation pursuant to §II above.
V. NOTICE
A. All notices to be given by the parties hereto shall be in writing and served by depositing same in the United States Post Office, postage prepaid and registered as follows:
TO THE CLIENT
The address set out in the Authorization to File Twitter Inc Claim form.
TO ATTORNEYS

Bottini & Bottini, Inc.

7817 Ivanhoe Ave., Suite 102

La Jolla, California 92037

Attention: Francis A. Bottini, Jr.

B. Any actions arising out of this Agreement shall be governed by the laws of California, and shall be brought and maintained in the San Diego Superior Court, which shall have exclusive jurisdiction thereof.
C. This agreement, along with the signed Certification and Authorization of Named Plaintiff, sets forth the entire Agreement between the parties, and supersedes all other oral or written provisions.

Notice of Opportunity: 

Bottini & Bottini and Cotchett Pitre & McCarthy have filed a lawsuit against Elon Musk and on behalf of all persons who SOLD Twitter securities at any time between May 13, 2022 and October 4, 2022, inclusive (the Class Period). A copy of the complaint is contained above under the "Complaint" tab. By Order dated April 24, 2023, the Hon. Charles Breyer appointed Bottini & Bottini and Cotchett Pitre & McCarthy as Lead Counsel for Plaintiffs and the Class.
On June 8, 2023, Plaintiffs filed a First Amended Complaint, a copy of which can be viewed by clicking on the "Complaint" tab.
Plaintiff's Complaint alleges that, after first agreeing to buy Twitter for $54.20 per share on April 25, 2022, Musk began denigrating Twitter and then trying to renegotiate the deal. Musk’s false statements and tweets have caused Twitter securities to substantially decline in value, resulting in an $8 billion loss of market capitalization. Twitter stock and bondholders who sold their securities while the prices were artificially depressed as a result of the fraud of Mr. Musk have been damaged and have the right to pursue damages against him.
The lawsuit alleges that Musk engaged in a series of intentional acts that harmed investors. First, Musk violated securities law by failing to timely disclose his increasing ownership of Twitter. He secretly amassed more than 5% of Twitter shares starting in January 2022 without disclosing it publicly, as he was required to by SEC rules. When Musk eventually got around to it, he purposely left out his intention to join Twitter’s Board or potentially buy the company outright. Musk then issued an ultimatum letter offering to buy Twitter for $54.20 per share or Musk would sell his 9.2% stock in Twitter. On April 25, 2022, Musk and Twitter announced the buyout without all the details or prior misconduct by Musk.
Musk pledged his Tesla shares as collateral for $12.5 billion in loans to finance part of the purchase price. Musk also initially sold roughly $8.5 billion of Tesla shares to raise funds for the buyout. But then Tesla shares began a steep decline that did not abate, dropping 37% after the announcement of the buyout, causing Musk to stop selling his shares. Musk is on the hook for billions more to complete this buyout both from his own cash and lenders. Tesla’s policies limit Musk’s ability to pledge his Tesla shares as collateral for personal loans to no more than 25% of the loan value, which threshold was breached as Tesla shares continued to plummet.
The lawsuit alleges that Musk came up with a plan to extricate himself from this dilemma by making false public statements about Twitter and the buyout to lower the price of Twitter shares. Musk made a series of these false statements that created leverage for himself to renegotiate or back out of the buyout by purposely casting doubt on whether the Twitter deal would go forward.
As alleged in the complaint, on May 13, 2022, just before the market opened, Musk tweeted that the buyout was “temporarily on hold” to manipulate the market. The buyout was not on hold and there is no provision in the contract that allows Musk to unilaterally put the deal on hold.
Musk then stated in a series of tweets that the buyout would be contingent on the number of fake accounts on Twitter. His tweets escalated and Musk later tweeted that the deal “cannot go forward” unless Musk was satisfied. Musk had no right to cancel the buyout or conduct an investigation into the number of fake accounts because Musk waived due diligence in the buyout contract. Musk was also well aware that Twitter had a certain amount of “fake accounts” and accounts controlled by “bots.” Musk also issued three separate letters stating that he had terminated the Twitter buyout. The value of Twitter stock declined substantially due to this fraud. But then Musk engaged in an abrupt about face on October 4, 2022, less than two weeks before trial was set to begin in Delaware in a case Twitter had filed to force Musk to go through with the buyout. Musk shocked the market on that date by announcing he was abandoning his meritless prior statements and that he would go through with the buyout on the original terms, including the $54.20 price per share. This unexpected news caused Twitter stock to skyrocket by 22% in one day, thus damaging Twitter stock and bondholders who had sold their securities in the weeks and months prior.
According to the lawsuit, Musk’s statements and conduct violated the anti-fraud provisions of the federal securities laws, which prohibit false statements and market manipulation. Specifically, the lawsuit alleges that Musk purposefully manipulated Twitter securities to lower their value. The lawsuit alleges that Musk’s sudden interest in fake accounts was a pretext to back out of the buyout or further lower the $54.20 buyout price.

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Class Period: 
Class Period
Press Release: 

San Diego, California, October 11, 2022. Bottini & Bottini, Inc., a law firm specializing in securities litigation, has filed a class action lawsuit on behalf of all persons who sold the common stock and securities of TWITTER, Inc. (NYSE: “TWTR”) at any time between May 13, 2022 and October 4, 2022, inclusive (the “Class Period”). The lawsuit—pending in the United States District Court for the Northern District of California—seeks to recover damages under the federal securities laws for those who sold Twitter securities during the Class Period.

Investors who have sold Twitter stock or other Twitter securities at any time between May 13, 2022 and October 4, 2022 and incurred losses are urged to contact the firm immediately at fab@bottinilaw.com or (858) 914-2001. Bottini & Bottini is representing clients on a contingency fee basis. You may obtain additional information concerning the action on our website, www.bottinilaw.com.

If you SOLD shares or other securities of TWITTER, Inc. and would like to assist with the case as a lead plaintiff, you must, no later than December 12, 2022, request that the Court appoint you as lead plaintiff of the proposed class.

The lawsuit charges that Defendant Elon Musk violated Section 10(b) of the Securities Exchange Act of 1934 by issuing false statements about his purchase of Twitter, Inc., including termination notices that falsely claimed that Twitter had breached terms of the merger agreement and that a Material Adverse Event (“MAE”) had occurred. On May 13, 2022, Musk tweeted that the merger was “temporarily on hold.” On May 17, 2022, Musk stated that the merger “cannot go forward” and claimed that almost 20% of Twitter accounts were fake. Musk thereafter issued three separate notices terminating the merger between July 8, 2022 and September 9, 2022 which falsely claimed that Twitter had breached terms of the merger agreement by not giving him documents about spam.

The complaint alleges that Musk’s statements were false because Musk was not entitled to due diligence and had in fact waived due diligence; Musk was well aware of the problem of bots and spam on Twitter, and there were no legally justifiable reasons for Musk to terminate the Merger.

On October 4, 2022, less than two weeks before he was set to go to trial in Delaware over the merger, Musk stated he would proceed with the Twitter buyout at the original $54.20 price, abandoning his prior positions and capitulating to Twitter. The announcement shocked the stock market and caused Twitter’s stock price to increase by 22%. Twitter stock and bondholders who sold their Twitter securities earlier in the year based on Musk’s false statements were damaged by selling at prices artificially depressed by Musk’s false statements.

If you wish to join the litigation or discuss your interests in this lawsuit, contact Frank A. Bottini of Bottini & Bottini, Inc. at (858) 914-2001 or fab@bottinilaw.com.

Contact:
Bottini & Bottini, Inc.
Frank A. Bottini, Esq.
Email: fab@bottinilaw.com
Tel: (858) 914-2001
SOURCE: Bottini & Bottini, Inc.

Compliant: 
(2023-06-08) Conformed First Amended Complaint.pdf
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