Elon Musk to Testify in Twitter Shareholder Lawsuit

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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 on behalf of Twitter shareholders who sold their stock between May and October 2022, claiming Musk violated federal securities laws.

Why it matters

This is not the first time Musk has faced allegations of duping investors with his social media posts. The outcome of this trial could have significant implications for Musk's reputation and future business dealings, as well as set precedents around social media executives' responsibilities to shareholders.

The details

The lawsuit alleges that Musk made false statements about putting the Twitter deal 'temporarily on hold' and claiming nearly 20% of Twitter accounts were 'fake,' which caused the stock price to tumble. Musk is also accused of making other false, disparaging statements about Twitter's business in an effort to renegotiate or back out of the deal. Twitter sued Musk to force him to complete the original $44 billion acquisition, which he eventually agreed to in October 2022.

• On May 13, 2022, Musk declared the Twitter deal was 'temporarily on hold'.
• In the following weeks, Musk continued to try to delay or get out of the deal.
• In July 2022, Musk said he would abandon the offer to buy Twitter after the company failed to provide enough information about fake accounts.
• On October 4, 2022, Musk offered to go through with the original $44 billion proposal to buy Twitter, which the company accepted.
• The $44 billion Twitter acquisition deal closed later in October 2022.

What’s next

The judge in the case will decide whether Musk's statements violated federal securities laws.