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Micro-blogging site Twitter has been sued for 124 million dollars by two financial firms for allegedly organizing a failed private sale of its shares in an attempt to increase investor interest days before the company's initial public offering.
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Precedo Capital Group and Continental Advisors, alleged that Twitter intentionally wanted to create an artificial private market wherein it could maintain its stock for 19 dollars per share, which would have allowed the company to set an artificial price floor of 17-20 dollars for its IPO, Wall Street Journal reports.
The lawsuit comes just days before the micro-blogging company is set to debut on the New York Stock Exchange.
The firms alleged that Twitter took the step to avoid excess of shares hitting the market, for which it also terminated an agreement with GSV Asset Management.
GSV was allowed to sell nearly 280 million dollars in Twitter shares on the secondary market.
