Elon Musk discusses past tweets, bots as he testifies at Twitter shareholder trial | Latest Tech News
Elon Musk took the stand in a shareholder trial on Wednesday in San Francisco, where he’s accused of making false and deceptive statements that drove down Twitter’s stock price before he purchased the social media platform for $44 billion in 2022.
The lawsuit was filed in October 2022 in the US District Court for the Northern District of California on behalf of Twitter shareholders who offered the stock between May 13 and Oct. 4, 2022, a few weeks before Musk’s buy of Twitter was finalized. It claims Musk violated federal securities legal guidelines by making false, public statements that “were carefully calculated to drive down the price of Twitter stock.”
The billionaire Tesla CEO reached a deal to buy Twitter and take it personal in April 2022. On May 13, however, he declared his plan “temporarily on hold” and said he wants to pinpoint the quantity of spam and pretend accounts on the platform.
The shareholder lawsuit claims Elon Musk violated federal securities legal guidelines by making false, public statements that “were carefully calculated to drive down the price of Twitter stock.” Getty Images
Twitter’s stock tumbled as a end result. A few days later, he tweeted that the deal “cannot go forward” and claimed that virtually 20% of Twitter accounts have been “fake,” according to the lawsuit.
The plaintiff’s lawyer, Aaron P. Arnzen, started with questioning Musk about his tweets — or lack of tweets — about his resolution to buy Twitter and his purchases of Twitter stock prior to deciding to take the company personal.
Wearing a black go well with and tie, Musk said he didn’t assume it was “material” when, in early 2022, he started amassing Twitter stock and didn’t tweet about it or disclose to the Securities and Exchange Commission. He said he’s purchased stock in “many companies” and didn’t post about it.
Once he did, Twitter’s stock jumped 27% in in the future.
“That sounds high,” Musk said.
Musk purchased Twitter for $44 billion in 2022. AP
Musk’s May 13 tweet — “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users” — was “false because the buyout was not, in fact, ‘temporarily on hold,’” the lawsuit says. That’s because Twitter didn’t agree to put the deal on maintain, and there was nothing in the merger settlement the 2 events signed that allowed Musk to put it on maintain, according to the lawsuit.
Arnzen questioned Musk about the tweet at size, asking if he thought whether or not it could have a “material impact” on Twitter’s stock. Musk said he made it express at the time that he was dedicated to the deal and that saying the deal was quickly on maintain was “like saying you’re going to be late for a meeting. (It doesn’t) mean you are not going to be at the meeting.”
Twitter’s stock fell almost 10% on May 13.
Boxes of paperwork pertaining to the trial., above. Getty Images
Arnzen repeatedly requested Musk if he stopped to assume about how the tweet would have an effect on the stock market. Musk answered, repeatedly, “I was simply speaking my mind.”
In the next weeks, Musk continued to attempt to delay or get out of the deal, which the lawsuit claims he did in the shape of false, disparaging statements about Twitter’s business that drove the San Francisco company’s stock down sharply.
In July 2022, Musk doubled down on the bots issue and said he would abandon his offer to buy Twitter after the company failed to present enough data about the quantity of pretend accounts. That’s even though the lawsuit notes that Musk waived due diligence for his “take it or leave it” offer to buy Twitter. That means he waived his proper to look at the company’s nonpublic funds.
Brian Belgrave, a plaintiff in the Twitter trial arrives at federal court. Getty Images
twitter shares closed at $36.81 on July 8, when Musk tweeted he was abandoning the deal over the pretend accounts issue. That’s 32% below Musk’s offer price of $54.20 per share. AFP via Getty Images
Musk was repeatedly requested Thursday if, before waiving due diligence, he requested about Twitter’s methodology for figuring out the quantity of pretend or spam accounts, which the company disclosed to be about 5%. Musk said he didn’t, but that he assumed if Twitter put one thing in an SEC submitting, “it would be accurate.”
“It subsequently turned out they misrepresented the number of bots,” he said. “They lied.”
The stock closed at $36.81 on July 8, when Musk tweeted he was abandoning the deal over the pretend accounts issue. That’s 32% below Musk’s offer price of $54.20 per share.
“To try to renegotiate the price or delay the merger, Musk made materially false and misleading statements and omissions, and engaged in a scheme to deceive the market, all in violation of the law,” the lawsuit says.
The drawback of bots and pretend accounts on Twitter wasn’t new. The company had paid $809.5 million in 2021 to settle claims it was overstating its growth charge and month-to-month consumer figures. Twitter also disclosed its bot estimates to the Securities and Exchange Commission for years, while also cautioning that its estimate is likely to be too low.
Twitter sued Musk to pressure him to full the deal, and Musk countersued. On Oct. 4, Musk provided to go through with his unique proposal to buy Twitter for $44 billion, which Twitter accepted. The deal closed later that month. In the following months, Musk slashed the company’s workforce, gutted its trust and security workforce and rolled back content moderation insurance policies. In July 2023, he renamed Twitter as X.
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