Twitter shareholder lawsuit accusing Elon Musk of driving down stock goes to jury: Knew what he was doing
Closing arguments concluded Tuesday in a trial pitting Elon Musk against Twitter shareholders who say the world’s richest man engaged in a pattern of deceptive behavior that misled investors as he attempted to back out of his $44 billion deal to buy the social media platform in 2022.The civil trial in San Francisco centers on a class-action lawsuit filed just before Musk took control of Twitter, which he later renamed X, in October 2022, six months after agreeing to buy the embattled company for $44 billion, or $54.20 per share.The price represents a sliver of the Tesla CEO’s fortune, now estimated at $839 billion.Much of the trial focused on Musk’s claims about the number of bots on Twitter.
Musk testified, as he long contended, that Twitter had a much higher number of fake and spam accounts than the 5% it disclosed in regulatory filings.He used what he called Twitter’s misrepresentation of the number of fake accounts on its service as a reason to retreat from the purchase.After Musk tried to back out, Twitter went to court in Delaware to force him to honor his original deal.
Just before that case was scheduled to go to trial, Musk reversed course again and agreed to pay what he had originally promised.Mark Molumphy, a lawyer for the plaintiffs, asked jurors to hold Musk accountable and compensate thousands of investors who lost money because of tweets Musk sent, including one from May 13, 2022, that said the deal was “on hold.”“He knew what he was doing,” Molumphy said.The plaintiffs argue that, as Tesla’s stock price declined and buying Twitter became too expensive for Musk, he tweeted statements that drove down the stock price in the hopes he could renegotiate the deal for a lower price or get out of it altogether.Musk’s tweets, the plaintiffs’ lawyer argued, were not some “innocent mistake” or a “stupid tweet” off the top of his head, but carefully calculated to drive down’s Twitter’s stock price.Michael Lifrak, a lawyer f...