Elon Musk Defends Himself in Court Over Posts Before Twitter Takeover

Elon Musk on Wednesday defended statements he made in the months leading up to the 2022 purchase of Twitter, saying he did not intend to intentionally manipulate stock prices before the deal.

In a San Francisco federal court, Musk testified in a trial brought by former Twitter shareholders who alleged the world’s richest man committed securities fraud, attempting to bring down the value of the social media platform before he purchased and renamed it X.

On behalf of the investors, attorney Aaron Arnzen peppered Musk with questions regarding high-profile tweets he posted, casting doubt on the deal and questioning the number of spam accounts on the platform in the months preceding his purchase. Arnzen also asked if Musk believed he could renegotiate a lower price for the acquisition at the time.

Musk deflected many of the inquiries, maintaining that his tweets were simply “speaking his mind,” and that changes in stock prices are “up to the market.” He repeatedly accused Twitter and its former executives of lying on U.S. Securities and Exchange Commission filings about the percentage of bot accounts on its site.

“They had misrepresented the number of bots … they had lied,” Musk repeatedly said throughout his hourslong testimony.

During the first three days of Musk’s civil trial, much of the testimony had focused on statements he made in May 2022, which alleged that he was misled about the number of spam and bot accounts on the platform.

While Musk had signed a binding agreement to purchase the site for $54.20 a share in April, in the following months, Arnzen suggested, the billionaire seemed to believe he might be able to back out or renegotiate the terms of the deal based on the bot statistics.

In social media posts dating back years, Musk has accused Twitter of being overrun by bot accounts. On the stand Wednesday, he argued repeatedly that more than 50% of comments and responses to his posts were filled with spam accounts.

“Anyone who used Twitter would realize there were a lot of bots and a lot of spam,” he said. “I definitely was complaining about bots for years; it was driving me crazy.”

According to Musk, he met with Twitter executives in early May — one month after they agreed to sell to him — and raised concerns about the company’s claims that less than 5% of the company’s then-240 million daily Twitter users were spam accounts.

He told the jury that he was “flabbergasted” when CEO Parag Agrawal and CFO Ned Segal said they did not know how the company determined the 5% figure.

Days later, Musk posted on Twitter that the deal was “temporarily on hold” pending evidence supporting how Twitter calculated that percentage. Hours later, he posted that he was “still committed to acquisition.”

After the initial post, Twitter stock took “the elevator to the basement,” dropping 18% over the following 48 hours, Arnzen told the jury.

Arnzen also asked Musk if, after the early May meeting, he “thought [he] could pay way less for Twitter — half the price?” He also asked the X-owner  whether he was “looking at an opportunity to revisit price.”

Musk said he believed there should have been an opportunity to renegotiate if there had been “material fraud” in calculating the numbers in Twitter’s SEC filings. Musk maintained, though, that he did not make any comments to intentionally depress stock prices or get a better deal on the purchase.

The tweets were intended to inform the public, he said, not sway stock prices.

“I’ve seen much bigger changes with no news,” Musk said on the stand. He did acknowledge that he knew the general public was closely attuned to his comments on social media.

This was in contrast with testimony from former stakeholders, who told the court they sold shares at deflated prices amid Musk’s public waffling. If he’s found guilty, he could be forced to repay them for the money they lost.

Separately, Musk also faces charges related to the Twitter acquisition brought by the SEC, which alleged he violated the law by not disclosing his stake in Twitter while the deal was being worked out.

When asked directly whether he thought of shareholders who might have sold their stock based on his comments at a deflated price, he said he didn’t have control over whether people chose to sell, adding that in the end, he bought Twitter at his originally proposed price, which was a “premium.”

“Share prices go up and down, but if somebody had simply held on to their position … the vast number of people benefited greatly from the acquisition,” he told the courtroom.