Musk Defends Tweets in Investor Lawsuit Accusing Him of Fraud

Elon Musk testified that he simply tweets “what’s on my mind” as he defended himself at trial against allegations that he used his social media posts to intentionally manipulate Twitter Inc.’s stock price before he bought the company in 2022.

Musk, the world’s richest person, is fighting claims by Twitter shareholders that he engaged in a fraudulent effort to tank the stock and get himself a better price for the buyout.

In San Francisco federal court Wednesday, Musk acknowledged that “perhaps my tweets have some effect on the market,” but also referred to the stock market as a “manic depressive” that can fluctuate.

“I tweet what’s on my mind and the market decides if it’s material,” he told the jury, adding that “people tend to read too much into things that I do.”

Musk 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.

Investors’ attorneys are likely to challenge the serial entrepreneur over multiple tweets he posted in May 2022, including one about putting the deal “temporarily on hold” to investigate how much of the platform’s traffic was driven by spam and fake accounts known as bots.

The company had disclosed in financial statements that bots could make up as much as 5% of its user base, but Musk said on Wednesday he felt that number was low.

“At least for me, half of my replies would be crypto spam or things that were unrelated to what I post,” Musk said.

Read More: Musk Tweet on Pausing Twitter Deal Was Frustration, Adviser Says

Despite Musk’s tweet stating that the deal was on hold, Twitter executives told employees 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.

Elon Musk, center, arrives at federal court in San Francisco on March 4.

Photographer: David Paul Morris/Bloomberg

In testimony Tuesday, Jared Birchall, Musk’s longtime business manager and confidante, said that his boss’s tweets four years ago were prompted by frustration, and not a malicious effort to sink the stock.

“Work never stopped on the deal,” Birchall testified, noting that Musk’s team held due-diligence meetings related to Twitter on the same day Musk posted about the deal being “on hold.”

Birchall told jurors that Musk took to his Twitter account out of irritation. “He’d made several requests for data about the bots and he hadn’t gotten it,” Birchall said.

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.

(Updates with Musk’s testimony starting in first paragraph)

To contact the reporters on this story:
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Kurt Wagner in San Francisco at kwagner71@bloomberg.net;
Isaiah Poritz in San Francisco at iporitz@bloomberg.net

To contact the editors responsible for this story:
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Sara Forden at sforden@bloomberg.net

Peter Blumberg, Stephanie Gleason

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