Elon Musk is slated to testify Wednesday in a jury trial over allegations that he manipulated Twitter Inc.'s stock price with his public tweets to try to get himself a better deal to buy the social network back in 2022.
Musk, the world's richest person, eventually bought Twitter for $44 billion and later renamed it X, but first spent several months publicly criticizing the company's business and threatening to walk away from the buyout.
A group of investors who sued Musk in San Francisco federal court allege that he posted misleading tweets about the deal process to drive down the company's market value and benefit himself at their expense.
Musk, who has denied wrongdoing, is the trial's star witness, and is expected to face sharp questioning from the investors' lawyers.
The attorneys are likely to challenge the serial entrepreneur over multiple tweets he posted in May 2022, including one in which he said he was putting the Twitter buyout “temporarily on hold” to investigate how much of the platform's traffic was driven by spam and fake accounts known as bots.
Twitter executives, meanwhile, told employees that the deal was still moving forward. The stock tumbled following Musk's post, and it remained volatile for months until the deal finally closed in October 2022 after the company sued him to follow through on his original offer.
“We're here today because Elon Musk cheated investors,” Mark Molumphy, a lawyer for the plaintiffs, told jurors in his opening statement on Monday. “The evidence will show Mr Musk knew exactly what he was doing” by tweeting out false and misleading information about the deal, the lawyer said.
Lawyers for Musk countered that his concerns about Twitter's user base “were real and weren't a fraud,” and that his tweets were not responsible for any stock price decline.
Musk is no stranger to testifying before a jury. He prevailed in a trial in 2023 over claims by Tesla Inc. investors that he misled shareholders with a 2018 tweet saying he had “funding secured” to take the electric vehicle-maker private. He took the witness stand in at least three other cases that were ultimately decided in his favor.
The US Securities and Exchange Commission is also suing Musk over the Twitter takeover, alleging he waited too long to publicly disclose his stake in the company, which the agency claims allowed him to buy up shares at artificially lower prices. Musk has denied wrongdoing.
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