❓WHAT HAPPENED: Elon Musk is set to testify in a shareholder lawsuit accusing him of making misleading statements that impacted Twitter’s stock price before he purchased the platform for $44 billion in 2022.
👤WHO WAS INVOLVED: Elon Musk, Twitter shareholders, and the U.S. District Court for the Northern District of California.
📍WHEN & WHERE: The trial is taking place in San Francisco, with the lawsuit originally filed in October 2022.
💬KEY QUOTE: “To try to renegotiate the price or delay the merger, Musk made materially false and misleading statements and omissions, and engaged in a scheme to deceive the market, all in violation of the law,” the lawsuit alleges.
🎯IMPACT: The case will consider how public statements from high-profile executives impact markets and shareholder rights.
Tech billionaire Elon Musk is expected to testify in a shareholder lawsuit in San Francisco stemming from his 2022 purchase of Twitter (now X). Filed in October 2022 in the U.S. District Court for the Northern District of California, the suit represents investors who sold Twitter shares between May 13 and October 4, 2022, before Musk completed his $44 billion acquisition.
Plaintiffs allege Musk violated federal securities laws by making statements that affected Twitter’s stock price. At the center of the case is his May 13, 2022, tweet declaring the deal “temporarily on hold” pending verification of spam and fake accounts. Shareholders argue the merger agreement did not allow him to pause the transaction unilaterally and say the post contributed to a sharp decline in the company’s share price.
“To try to renegotiate the price or delay the merger, Musk made materially false and misleading statements and omissions, and engaged in a scheme to deceive the market, all in violation of the law,” the suit states.
Musk continued raising concerns about bot and spam accounts in the following weeks, despite having waived due diligence when making his offer. In July 2022, he announced he was terminating the agreement, citing insufficient information about fake accounts, prompting further stock declines. Twitter sued to force completion of the deal, and Musk countersued.
On October 4, 2022, Musk agreed to proceed with the original $44 billion offer, and the acquisition closed later that month. After taking control, he implemented sweeping changes, including significant layoffs, restructuring of “trust and safety” operations, and revisions to content moderation policies. In July 2023, he rebranded Twitter as X.
This is not Musk’s first legal dispute over social media statements. In 2018, he faced trial over tweets about taking Tesla, Inc. private, but a jury found in his favor.
Musk, who also leads SpaceX, has recently drawn attention for Tesla’s reported plans to build a large-scale battery facility in China. Reports have also noted that Tesla filed thousands of H-1B visa labor applications in a single year, highlighting its reliance on specialized foreign workers.
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