Closing Arguments Begin in Suit Against Musk Over Shareholder Claims

Closing arguments are set to begin in a trial involving Elon Musk and Twitter shareholders, who allege the billionaire misled investors while attempting to withdraw from his $44 billion acquisition of the social media platform in 2022, Barbara Ortutay reported for the Associated Press (AP).

Musk has argued that Twitter significantly understated fake accounts, exceeding the 5% figure disclosed in regulatory filings, and cited this as a reason for attempting to withdraw from the deal. (Photo: Office of Speaker Mike Johnson) 

The civil trial in San Francisco centers on a class-action lawsuit filed shortly before Musk completed the acquisition of Twitter, which he later renamed X, in October 2022, six months after agreeing to purchase the company for $44 billion, or $54.20 per share.

Much of the case has focused on Musk’s claims regarding the number of bot and spam accounts on the platform.

Musk has argued that Twitter significantly understated fake accounts, exceeding the 5% figure disclosed in regulatory filings, and cited this as a reason for attempting to withdraw from the deal.

After Musk sought to back out, Twitter filed suit in Delaware to compel him to proceed with the acquisition.

Just before the case went to trial, Musk reversed course and agreed to complete the deal at the original price. Concerns over bots were not new.

In 2021, Twitter paid $809.5 million to settle claims that it had overstated user growth metrics. The company had also long disclosed its bot estimates to the Securities and Exchange Commission, while cautioning that the figures could be understated.