A judge has denied a shareholder-led lawsuit targeting Tesla CEO Elon Musk over his handling of last year’s Twitter buyout.
The class-action suit alleged that Musk had acted unfairly towards investors on multiple occasions throughout the entrepreneur’s purchase of the social media site, namely by waiting to inform the public of his 9.2% stake in Twitter until after the buyout was announced. Arguing that this allowed the Tesla CEO to pay less for shares, the plaintiff, William Heresniak, also claimed that the decision to place the platform’s co-founder Jack Dorsey on the board was made to leverage his $1 billion share to pay for the Twitter buyout. However, while Heresniak is far from being the only investor frustrated with Musk’s behaviors, San Francisco judge Charles Breyer dismissed the case on the grounds that Heresniak did not have the appropriate standing to sue.
In his decision, Breyer concluded that Heresniak failed to prove how either of the alleged actions resulted in damages, noting that the plaintiff’s case focused on “wrongs associated with” the purchase of Twitter but not the purchase itself. The statement echoes comments made by the Tesla CEO’s lawyers in March, in which the lawsuit was called “a disjointed list of – often irrelevant – grievances against Elon Musk.”
The end of the case comes amidst a general sense of frustration over Musk’s Twitter purchase. While the buyout itself remains controversal, the frequent and sometimes questionable changes made to the social media platform’s layout and rules have garnered even greater criticism from users and experts alike. Earlier this month, the Tesla CEO announced his replacement at the company, Linda Yaccarino, a former advertising executive.
