Elon Musk to testify in Twitter shareholder lawsuit over alleged stock price manipulation

Elon Musk is expected to testify in a shareholder trial in San Francisco over allegations that he made misleading statements to depress Twitter’s (now X) stock price before completing his $44 billion acquisition of the platform in 2022.

The lawsuit, filed in October 2022, represents investors who sold Twitter shares between May 13 and October 4, 2022. 

Shareholders claim Musk violated federal securities laws by issuing public remarks that were “carefully calculated” to push the company’s stock lower during his takeover bid.

Among the statements cited are Musk’s assertion that the deal was “temporarily on hold” and his claim that nearly 20% of Twitter accounts were fake or spam.

Investors argue that such comments caused uncertainty in the market and contributed to a sharp decline in the company’s share price.

In July 2022, Musk announced he intended to terminate the agreement, alleging that Twitter had failed to provide sufficient data about fake accounts. 

However, the complaint notes that Musk had waived due diligence when he submitted his “take it or leave it” offer, meaning he declined the opportunity to review certain nonpublic financial details before agreeing to the purchase.

On July 8, 2022, the day Musk said he was walking away from the deal, Twitter shares closed at $36.81 — about 32% below his $54.20-per-share offer. 

The trial’s outcome could carry significant consequences for Musk’s business practices and corporate communications moving forward.