US District Judge Charles Breyer in San Francisco, Calif. ruled Monday to dismiss a class-action lawsuit against Twitter owner Elon Musk. The lawsuit claimed Musk cheated shareholders several times last year in the course of buying the social media company for $44B.
Breyer said the plaintiff, William Heresniak — who filed the suit one month before Twitter accepted the buyout on Oct. 27, 2022 — lacked standing to sue because he challenged "wrongs associated with" Musk’s buyout rather than the fairness of the buyout itself.
Musk's lawyers justifiably characterized this lawsuit as a "disjointed laundry list of — often irrelevant — grievances," and Judge Breyer agrees. While Musk may have enriched himself as a result of the buyout, even though the company has since lost half its value, Heresniak didn't lose any money from it. There was no proof the plaintiff actually lost any cash over this.
Though company acquisitions are typically mutually beneficial agreements for both buyers and sellers, Musk's decision to publicly bid on the company — and then abruptly pull out of the deal — was not a typical acquisition. Musk did eventually pay the $44B offer that he went to court over, but that doesn't take away the dip in share prices that occurred between the day he first announced his bid and the day the deal went through.