Elon Musk is accused of making false and misleading claims that caused Twitter’s share price to drop before he purchased the social media company for $44 billion (€37.9 billion) in 2022. Musk is scheduled to testify in a shareholder trial in San Francisco on Wednesday.
A few weeks before Musk’s acquisition of Twitter was finalized, in October 2022, the case was brought in the US District Court for the Northern District of California on behalf of Twitter stockholders who had sold their stock between May 13 and October 4, 2022.
It alleges that by making misleading public remarks that “were carefully calculated to drive down the price of Twitter stock,” Musk broke federal securities laws. In April 2022, Tesla’s millionaire CEO reached an agreement to purchase Twitter and take it private.
However, on May 13, he put his proposal “temporarily on hold” and stated that he needed to determine how many phony and spam accounts there were on the site. As a result, Twitter’s stock fell. Soon after, he tweeted that the agreement “cannot go forward” and that nearly 20% of Twitter accounts were “fake,” according to the lawsuit.
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