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Khalid v. Musk, C.A. No. 2024-0443-KSJM (Del. Ch. July 18, 2025)
The plaintiff acquired Twitter stock following Elon Musk’s announcement that he agreed to acquire the company. The plaintiff then sold the stock at a loss following Musk’s statements that he intended to terminate the merger agreement. The plaintiff brought a mix of tort, fiduciary, and contract claims. The Court dismissed the claims against Musk, because it lacked specific personal jurisdiction over him for those claims. The Court further dismissed the plaintiff’s claims as to the other defendants. The Court reasoned that the plaintiff could not assert contract claims because he was not a party to the merger agreement or an intended third-party beneficiary. The Court further dismissed the plaintiff’s breach of fiduciary duty claims because the plaintiff sold his shares, and he thus lacked standing. The Court also dismissed the plaintiff’s unjust enrichment claims because the relationship between the alleged enrichment to Musk and harm to the plaintiff was too attenuated. The Court also reasoned that various alleged violations of the SEC rules occurred prior to the plaintiff’s purchase of stock.
