Australian stocks jumped Friday after a wave across Wall Street, as Twitter shareholders sued billionaire Elon Musk, accusing him of manipulating the company’s stock price.
The ASX 200 index was up 1.1 percent to 7,184 points at 10:20 a.m. AEST.
All sectors traded higher, with consumer discretionary and technology posting the strongest gains.
Shares of Macquarie Group (+2.2pc), AMP (+2pc), Domain (+1.8pc), Rio Tinto (+1.5pc) and BHP (+1.5pc) have surged in morning trading.
The Australian dollar was slightly higher at 71.1 cents.
In local news, Telstra has paid $11 million to more than 67,000 customers for taking too long to connect or repairing landlines and not shouldering the cost.
The S&P 500 gained 2 percent overnight in New York, closing at 4,058 points. The Nasdaq Composite rose 2.6 percent to 11,740, while the Dow Jones index rose 1.6 percent to 32,640.
In the oil markets, Brent crude futures rose 3.2 percent to $117.62 a barrel.
Spot gold fell marginally to $1,849.65 an ounce.
In their court files, the Twitter investors claimed that Elon Musk saved himself $156 million by failing to disclose that he had bought more than 5 percent of Twitter on March 14.
The allegation is that Mr. Musk continued to buy stock afterward and, eventually, revealed in early April that he owned 9.2 percent of the company, according to the lawsuit filed Wednesday local time in San Francisco federal court.
They asked to be certified as a class and to be awarded an unspecified amount in damages.
Neither Mr Musk nor his attorney immediately responded to requests for comment. Twitter declined to comment.
The investors also said the recent drop in Tesla stock has put Mr. Musk’s ability to fund his Twitter takeover in “great jeopardy” as he has pledged his shares as collateral to secure the loans he has taken. needs to buy the company.
Shares of Tesla traded at about $713 on Thursday afternoon, down from more than $1,000 in early April.
Earlier this month, the Wall Street Journal reported that the timing of Musk’s disclosure of his stake had already prompted an investigation by the U.S. Securities and Exchange Commission (SEC).
The SEC requires any investor who purchases an interest greater than 5 percent in a company to disclose their holdings within 10 days of crossing the threshold.
And the investors have also said that Mr. Musk’s public criticism of the company — including a May 13 tweet that said the acquisition was “temporarily on hold” until Twitter proved that less than 5 percent of users were spam bots — amounted to an attempt to drive the share price further down.
Mr. Musk has pledged an additional $6.25 billion in equity financing to fund his Twitter offer, a sign that he is still working to complete the deal.
Telstra’s $11 Million Compensation
Telsta has admitted that an IT glitch led the company to accept responsibility for refunding customers more than 67,000 times between 2017 and 2021 within 14 days.
Under industry rules, telcos that fail to meet fixed connections and repairs deadlines have 14 days to assess whether they accept liability.
Telstra itself reported the matter to the Australian Communications and Media Authority (ACMA), saying it had always intended to refund the money to customers, but it simply took too long to do so.
“We identified an IT issue that prevented some customers from receiving Customer Service Guarantee payments when they should have,” said a company spokesperson.
“After this, we dug deeper into our systems to verify CSG payments, and this identified a number of other cases where payments were not made when they should have been.
“We process millions of customer transactions every week, but this is clearly not the experience we want to offer our customers… we are improving the system to better automate payments.”
In addition to paying $11 million in damages, Telstra has made a court-enforceable commitment to improve its payment review solution and to report regularly on its compliance with its compensation rules for two years.
ACMA chairman Nerida O’Loughlin said Telstra had let its customers down.
“Telstra knows it has had a problem with its internal systems and processes, discovered through its T22 business strategy… the company has self-reported these and other recent breaches,” she said.
“It is critical that Telstra addresses these long-standing challenges when building new systems and processes and, where required, compensates its customers for historic telecom rule violations.”
‘Aggressive’ rate hikes
On a weekly basis, US markets are on track to break their longest losing streak in decades, in which the S&P benchmark plunged 14.1 percent and brought it close to being confirmed as a bear market.
Minutes from the Fed’s May meeting, released local time on Wednesday, show a majority of its officials are behind rate hikes of 50 basis points each in June and July to curb high inflation.
However, the US central bank also indicated that it could pause its rate hikes in September.
“The Fed has locked itself in delivering a few half-point rate hikes until the Jackson Hole Symposium, and that has removed the risk of aggressive short-term tightening,” said OANDA analyst Edward Moya.
At current levels, all three US indices are poised to record their biggest weekly gains since mid-March.
“If the Fed is too aggressive, they will choke inflation, but also economic growth,” said Sam Stovall, chief investment strategist at CFRA Research.
Posted † updated
#Elon #Musk #sued #Twitter #investors #market #manipulation #ASX #tracks #Wall #higher