Elon Musk Testifies in Twitter Shareholder Trial Over Alleged Stock Manipulation

Elon Musk took the stand Wednesday in a federal court in San Francisco, defending himself against claims that he manipulated Twitter’s stock to lower its price before buying the company for $44 billion in 2022.

The class-action lawsuit, filed in October 2022, was brought on behalf of Twitter shareholders who sold stock between May 13 and October 4, 2022, weeks before Musk finalized the purchase.

Plaintiffs allege that Musk made false and misleading public statements to intentionally drive down Twitter’s share price, violating federal securities laws.

Musk, Tesla’s CEO, had agreed to take Twitter private in April 2022. On May 13, he tweeted that the deal was “temporarily on hold” while he reviewed the number of spam and fake accounts on the platform CBS News reported.

Twitter’s stock dropped nearly 10% that day. A few days later, Musk tweeted the deal “cannot go forward,” claiming up to 20% of accounts were fake, according to the lawsuit.

Plaintiff lawyer Aaron P. Arnzen questioned Musk about his tweets and his prior purchase of Twitter stock. Musk said he didn’t consider his stock purchases material enough to disclose to the SEC and noted, “I’ve bought stock in many companies” without tweeting about it.

He added that once he publicly mentioned the deal, Twitter’s stock jumped 27% in a single day.

Elon Musk Threatened to Abandon Twitter Deal

Regarding the May 13 tweet, Musk told the court that the statement about the deal being temporarily on hold was similar to “saying you’re going to be late for a meeting. (It doesn’t) mean you are not going to be at the meeting.”

Musk repeatedly said he was “simply speaking my mind” when asked if he considered how the tweets might affect the stock.

The lawsuit also focuses on Musk’s actions in July 2022, when he threatened to abandon the deal over the number of spam accounts, despite waiving due diligence.

Musk admitted he assumed Twitter’s SEC filings were accurate, saying, “It subsequently turned out they misrepresented the number of bots. They lied.”

Twitter eventually sued Musk to enforce the deal, and Musk countersued.

According to CBNC, he later completed the acquisition at $44 billion in October 2022, subsequently rebranding Twitter as X and merging it with his other ventures, including xAI and SpaceX.

Originally published on vcpost.com