Tesla CEO Elon Musk, who's never out of controversies, has stirred up another row with his acquisition of a 9.2% stake in social media platform Twitter Inc. Former Twitter shareholders have proposed class action against Musk in Manhattan federal court in the US, accusing the world's richest businessman of making "materially false and misleading statements and omissions" by not revealing his stake in Twitter by March 24 as per the federal law, a global news agency reported.

Following the information regarding Musk buying a stake in Twitter went was made public on April 4, the company's share rose 27% to $49.97 from $39.31 during the previous session. The former shareholders have alleged that the delay in revealing the information about his stake allowed Musk to buy Twitter shares at lower prices. At the same time, these shareholders had to sell their stake at "deflated" prices, they alleged.

The securities law in the U.S. requires investors to disclose their holding of 5% in a company in 10 days. As per the regulatory filing with the US Securities & Exchange Commission, since Musk bought the stake on March 14, the last date to reveal the information should have been March 24.

Tesla CEO Elon Musk had acquired a 9.2% stake or 73.5 million shares in Twitter, making him the largest shareholder of the microblogging platform. Musk's shareholding is more than four times the 2.25% stake held by Twitter founder Jack Dorsey.

The information regarding his stake was made public on April 4.

Twitter CEO Parag Agrawal on April 5 said that Elon Musk has been appointed as a board member of the microblogging platform. He also said that Musk is a passionate believer and intense critic of the service, which is exactly what Twitter needs to make it stronger in the long term.

However, he backtracked from his statement on April 11, saying Elon Musk will not be joining the company's board. "Elon Musk has decided not to join our board...," he said, adding that Elon had said he will no longer be joining the board.

Some industry watchers said the reason behind Musk not joining the Twitter board could be because this way, he no longer has to comply with the 14.9% limit for board members to buy a stake in a company. Some even said Musk could push some major changes in the company.

Last month, Musk, who's a prolific Twitter user, had asked his 81.5 million subscribers if they believed Twitter rigorously adheres to free speech, which is essential to a functioning democracy. 70.4% of users said 'no', the poll data showed. He even asked his users if there was a need for a "new platform".

Ever since he bought a stake in the company, he has been coming up with some unique ideas for the company. "Convert Twitter SF HQ to homeless shelter since no one shows up anyway," he asked his followers in a Twitter poll this week. Musk also recommended a paid authentication checkmark and asked if Twitter should accept payments in cryptocurrency Dogecoin.

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