Elon Musk to Testify in Twitter Shareholder Lawsuit

Got story updates? Submit your updates here. ›

Elon Musk is expected to take the stand in a shareholder trial in San Francisco, where he is accused of making false and misleading statements that drove down Twitter's stock price before he bought the social media platform for $44 billion in 2022. The lawsuit was filed by Twitter shareholders who sold their stock between May and October 2022, claiming Musk violated federal securities laws.

Why it matters

This case highlights the ongoing scrutiny and legal challenges Musk faces over his business dealings and social media activity. The outcome could have implications for how executives communicate about potential mergers and acquisitions, as well as the responsibilities of large shareholders in publicly traded companies.

The details

The lawsuit alleges that Musk made false statements, including declaring the Twitter deal was 'temporarily on hold' and claiming nearly 20% of Twitter accounts were 'fake.' This caused Twitter's stock to tumble, allowing Musk to potentially renegotiate the purchase price. The lawsuit claims Musk waived due diligence but then used the bot issue to try to delay or back out of the deal, all while making disparaging statements about Twitter's business.

• Musk reached a deal to buy Twitter in April 2022.
• On May 13, 2022, Musk declared the Twitter deal was 'temporarily on hold'.
• In the following weeks, Musk continued to make statements about Twitter's bot issues.
• In July 2022, Musk said he would abandon the offer due to the bot issue.
• The deal closed in October 2022 after Musk offered to proceed with the original $44 billion price.

What’s next

The judge in the case will decide whether Musk's statements violated securities laws and if shareholders are entitled to damages.