SAN FRANCISCO (AP) \u2014 Elon Musk is expected to take the stand in a shareholder trial on Wednesday in San Francisco, where he’s 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.<\/p>\n
The lawsuit was filed in October 2022 in the U.S. District Court for the Northern District of California on behalf of Twitter shareholders who sold the stock between May 13 and Oct. 4, 2022, a few weeks before Musk’s purchase of Twitter<\/a> was finalized. It claims Musk violated federal securities laws by making false, public statements that \u201cwere carefully calculated to drive down the price of Twitter stock.\u201d<\/p>\n The billionaire Tesla CEO reached a deal to buy Twitter and take it private in April 2022. On May 13, however, he declared his plan \u201ctemporarily on hold\u201d and said he needs to pinpoint the number of spam and fake accounts on the platform. Twitter’s stock tumbled as a result. A few days later, he tweeted that the deal \u201ccannot go forward\u201d and claimed that almost 20% of Twitter accounts were \u201cfake,\u201d according to the lawsuit.<\/p>\n Musk’s May 13 tweet \u2014 \u201cTwitter deal temporarily on hold pending details supporting calculation that spam\/fake accounts do indeed represent less than 5% of users\u201d \u2014 was \u201cfalse because the buyout was not, in fact, \u2018temporarily on hold,\u2019\u201d the lawsuit says. That’s because Twitter did not agree to put the deal on hold, and there was nothing in the merger agreement the two parties signed that allowed Musk to put it on hold, according to the lawsuit.<\/p>\n In the following weeks, Musk continued to try to delay or get out of the deal, which the lawsuit claims he did in the form of false, disparaging statements about Twitter’s business that drove the San Francisco company’s stock down sharply.<\/p>\n In July 2022, Musk doubled down on the bots issue and said he would abandon his offer to buy Twitter<\/a> after the company failed to provide enough information about the number of fake accounts. That’s even though the lawsuit notes that Musk waived due diligence for his \u201ctake it or leave it\u201d offer to buy Twitter. That means he waived his right to look at the company\u2019s nonpublic finances.<\/p>\n The stock closed at $36.81 on July 8, when Musk tweeted he was abandoning the deal over the fake accounts issue. That’s 32% below Musk’s offer price of $54.20 per share.<\/p>\n \u201cTo 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,\u201d the lawsuit says.<\/p>\n The problem of bots and fake accounts on Twitter<\/a> wasn’t new. The company had paid $809.5 million in 2021 to settle claims it was overstating its growth rate and monthly user figures. Twitter also disclosed its bot estimates to the Securities and Exchange Commission for years, while also cautioning that its estimate might be too low.<\/p>\n Twitter sued Musk to force him to complete the deal, and Musk countersued. On Oct. 4, Musk offered to go through with his original proposal<\/a> to buy Twitter for $44 billion, which Twitter accepted. The deal closed later that month. In the ensuing months, Musk slashed the company’s workforce, gutted its trust and safety team and rolled back content moderation policies. In July 2023, he renamed Twitter as X.<\/p>\n This isn\u2019t the first time that Musk has been dragged into court to defend himself against allegations of duping investors with his social media posts. Three years ago, Musk spent about eight hours testifying in a San Francisco federal trial<\/a> about his plans to buy Tesla \u2014 the electric automaker that he still runs as publicly traded company \u2014 for $420 per share in a proposed 2018 deal that never materialized. A nine-member jury absolved Musk of wrongdoing<\/a> in that case.<\/p>\n","protected":false},"excerpt":{"rendered":" SAN FRANCISCO (AP) \u2014 Elon Musk is expected to take the stand in a shareholder trial on Wednesday in San Francisco, where he’s 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 in October 2022 … Continue reading Elon Musk to take stand in Twitter shareholder trial accusing him of deflating stock before purchase<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[2851],"tags":[],"class_list":["post-1485405","post","type-post","status-publish","format-standard","hentry","category-state-news-archive"],"publishpress_future_action":{"enabled":false,"date":"2026-06-06 11:09:02","action":"change-status","newStatus":"trash","terms":[],"taxonomy":"category","extraData":[]},"publishpress_future_workflow_manual_trigger":{"enabledWorkflows":[]},"_links":{"self":[{"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=\/wp\/v2\/posts\/1485405","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1485405"}],"version-history":[{"count":2,"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=\/wp\/v2\/posts\/1485405\/revisions"}],"predecessor-version":[{"id":1485644,"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=\/wp\/v2\/posts\/1485405\/revisions\/1485644"}],"wp:attachment":[{"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1485405"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1485405"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1485405"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}