SAN FRANCISCO (AP) — Elon Musk took the stand Wednesday to defend himself in a civil trial over claims he misled investors about his $44 billion acquisition of Twitter, which he rebranded as X. Musk, now a billionaire with an estimated net worth of $841 billion, faced allegations from Twitter shareholders who sold their shares between May 13 and October 4, 2022.
The lawsuit argues that Musk violated federal securities laws by driving down Twitter’s stock price. He insisted that he was misled about the number of fake accounts on the platform, repeating his concerns about Twitter’s bot estimates being as low as 5%. Musk described the information from Twitter’s board as “BS,” reflecting his frustration.
The issue of fake accounts wasn’t new; in 2021, Twitter paid $809.5 million to settle claims about overstating user growth. Musk claimed he felt betrayed by Twitter’s board during negotiations, admitting there were threats exchanged between both sides.
When Musk tried to back out of the deal in July 2022, Twitter took him to court to enforce the agreement. Just before the trial began, he agreed to move forward with the purchase. Musk testified that his lawyers warned him that the judge in Delaware could be biased against him, which influenced his decision to complete the deal.
Despite the turmoil, Musk argued that his commitment to the original sales price ultimately benefited most Twitter shareholders. However, the uncertainty around the deal caused the company’s stock to drop significantly below his purchase price, leading to major losses for those who sold during that period.
This isn’t the first legal battle for Musk regarding investor communications. In 2018, he faced scrutiny for tweets about taking Tesla private at $420 a share but was cleared of wrongdoing in a subsequent trial. Musk acknowledged his tendency to share too much on social media, stating, “What I think privately is what I say publicly.”
After Wednesday’s session, Musk is set to resume testimony, shedding further light on his controversial business decisions and the legal implications surrounding them.
Recent research shows that 73% of investors are concerned about misleading information on social media. In contrast, transparency in communication has become increasingly important for maintaining trust in the tech sector. As this trial unfolds, it underscores the delicate balance between personal expression and responsibility that business leaders must navigate in today’s digital age.
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