Musk Testifies in Twitter Stock Lawsuit, Defends Bot Claims

Tesla CEO Elon Musk appeared in a San Francisco courtroom Thursday to defend his actions before purchasing Twitter in 2022. Investors claim his statements deliberately drove down Twitter's stock price, costing them millions.

SAN FRANCISCO (AP) — Tesla CEO Elon Musk took the witness stand Thursday in a San Francisco courtroom, standing by his controversial statements made before his $44 billion acquisition of Twitter in 2022. The billionaire faces accusations from investors who claim his public comments deliberately misled them and resulted in significant financial losses.

The legal battle stems from a class-action suit filed shortly before Musk’s takeover of the social media platform, which he later rebranded as X. The deal was finalized in October 2022, half a year after Musk initially agreed to purchase the struggling company at $54.20 per share.

Shareholders who sold their Twitter stock between May 13 and October 4, 2022, are represented in the lawsuit. They argue that Musk intentionally violated federal securities regulations through strategic moves designed to lower the company’s share value, hoping to either abandon the purchase entirely or negotiate a reduced price.

During his second day of testimony, Musk maintained his position that Twitter harbored significantly more fraudulent and spam accounts than the company’s official disclosure of 5 percent in regulatory documents.

The issue of automated accounts and fake profiles on Twitter predated Musk’s acquisition negotiations. In 2021, the company agreed to pay $809.5 million to resolve allegations that it had inflated its user growth statistics and monthly active user counts. Twitter had also regularly reported its bot estimates to the Securities and Exchange Commission over multiple years, acknowledging that their calculations could potentially underestimate the actual figures.

However, Musk and certain independent analysts contend the actual percentage was far greater, reaching at least 20 percent. During his testimony, Musk described claiming the bot percentage was at minimum this level as equivalent to “saying the grass is green or the sky is blue.”