Elon Musk defended his actions in court Thursday during a civil trial in San Francisco, which centers on a class-action lawsuit alleging he misled investors and caused them to lose millions of dollars prior to his 2022 acquisition of Twitter, now renamed X [1]. The lawsuit represents Twitter shareholders who sold their stock between May 13 and October 4, 2022, and claims Musk violated federal securities laws by taking steps to drive down Twitter’s stock price, potentially to either terminate the deal or negotiate a lower purchase price [1]. Musk had agreed to buy Twitter for $44 billion, or $54.20 per share, six months before taking control in October 2022 [1].
On the stand for the second day, Musk reiterated his assertion that Twitter had a much higher number of fake and spam accounts than the 5% figure disclosed in regulatory filings, stating the actual number was at least 20% [1]. He likened this claim to “saying the grass is green or the sky is blue” [1]. The issue of bots and fake accounts was not new; Twitter had previously paid $809.5 million in 2021 to settle claims it overstated its growth rate and monthly user figures, and had cautioned in SEC filings that its bot estimates might be too low [1].
Some outside analysts also supported Musk’s higher estimate of fake accounts, but Twitter had consistently disclosed its own figures and warnings to regulators [1]. The trial’s outcome could have implications for investor confidence and the legal responsibilities of high-profile buyers during acquisition negotiations, especially when public statements may affect share prices [1].
Market reactions or forward-looking statements from analysts are not explicitly discussed in the article. However, the lawsuit’s focus on alleged manipulation and investor losses suggests a medium level of market impact, particularly for those holding Twitter shares during the specified period [1].
CONCLUSION
Elon Musk’s defense in the ongoing class-action lawsuit highlights the contentious debate over Twitter’s bot numbers and the impact of his public statements on the company’s stock price. The trial could influence future acquisition negotiations and investor protections, but no specific analyst opinions or market reactions are provided in the article. The market takeaway centers on the legal scrutiny of Musk’s actions and their effect on Twitter shareholders.