Elon Musk is in court because he could not stop himself from tweeting during a $44bn takeover brawl.
The billionaire told a San Francisco jury that his post was not meant to manipulate Twitter’s share price while he was trying to buy the company.
A group of Twitter investors claims they lost money after Musk threatened to walk away to gain leverage, even though he knew he would be forced to finish the $44bn buyout.
After signing a binding agreement in April 2022 and waiving his right to due diligence, Musk started moaning about the number of bots on the platform.
On 13 May 2022 he tweeted the deal was “temporarily on hold” unless Twitter could prove “spam/fake accounts do indeed represent less than five per cent of users”. The stock fell nine per cent when markets opened.
The trial is the latest legal headache sparked by Musk’s habit of firing off posts on a platform he later rebranded as X and merged with xAI and SpaceX.
Musk said he wrote the post in the early hours and did not run it past advisers or mates. X owner Elon Musk told the court: “It may not have been my wisest tweet,” adding, “I am not sure I would call it incredibly stupid… but if it led to this trial, it probably qualifies as such.”
He said the “on hold” wording was literal, like saying he would be late to a meeting, and claimed he did not think investors would see the takeover as in doubt.
Four days later, on 17 May 2022, Musk doubled down, posting that the deal “cannot go forward”. At a Miami conference, he accused Twitter of lying in filings and said, “You can’t pay the same price for something that is much worse than they claimed.”
When Twitter chief executive Parag Agrawal pushed back that the bot data was accurate, Musk replied with a poop emoji on Twitter.
Twitter shares later slid to just above $30, about a third below the deal price. The investors now suing sold at the lower price, before the takeover, which still closed in October at $54.20 a share, after Twitter’s board sued.
Lawyers for the plaintiffs said Musk was following banker advice to use a “rope a dope” or “jujitsu strategy” by offering a flashy deal, then threatening to bail.
Musk denied it, saying he was “simply speaking my mind” and trying to save the platform by flagging bot concerns.
He told the court markets can act like a “manic depressive and people tend to read too much into things that I do.”
The plaintiffs argue he misled the market because he knew, or should have known, that the contract barred extra checks after he waived diligence, with penalties designed to stop him from walking.
They showed emails sent to Musk and aides from Barclays bankers on 9 May, days before the “on hold” tweet. One banker wrote: “This could present you with an opportunity to revisit price. It may not be a costless ask, as you will have to be perceived as being willing to risk paying the reverse break fee. However, the threat of walking away may be sufficient to get them to agree to a lower price.”
A later Barclays email said investors were giving the deal “50/50 odds” and that the share price would not rise because they feared “more tweets with deal implications”.
Musk replied: “Matches my understanding of things.”
If the jury backs the plaintiffs, damages could run into the billions.
One attorney for the four plaintiffs said: “Musk believes he can say or do whatever he wants anytime he wants, regardless of the consequences,” adding that after struggling to sell enough Tesla stock to fund the deal, he put on “a public spectacle to trash the company and drive stock price down”.
Musk bristled during questioning, accusing lawyers of asking questions “designed to mislead the jury” and trying to “put words into my mouth”.
He claimed he had not read deposition transcripts or prepared properly because he has “an insane workload, 100 hours a week”.
During the two-week trial, plaintiffs plan to call several Musk lieutenants, including his lawyer Alex Spiro, who has stepped aside as an attorney in the case because he is a witness.
On Tuesday, they questioned family office head Jared Birchall, who said Musk’s tweets came from frustration and that work on the deal never stopped.
