Musk Says Tweet at Center of Investor Fraud Case Not ‘My Wisest’

Elon Musk told a jury that a tweet he sent in the middle of his tumultuous move to buy Twitter Inc. in 2022 may not have been his “wisest” social media post, while denying he meant any harm to the platform’s shareholders.

Musk took the witness stand in San Francisco federal court Wednesday to defend himself against claims that he used his social media account to drive down Twitter’s stock price so that he could ultimately get a better deal for the company.

Investors in the class-action case have alleged that the world’s richest person intentionally misled them when he tweeted that the deal was “temporarily on hold” while he investigated how much of the platform’s traffic was driven by spam and fake accounts known as bots.

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

Photographer: David Paul Morris/Bloomberg

In his testimony, Musk argued his statement was very different from walking away from the deal entirely. “I’m not saying I’m not going to do the deal,” he told the jury. “At no point did I say the deal was canceled.”

Still, he acknowledged under questioning from a lawyer for the investors that the post was ill-advised.

“It may not be my wisest tweet,” he said. “I don’t know if I would call it my stupidest. But if it led to this trial it probably qualifies as such.”

Musk occasionally has moments of introspection in his many court battles. Two years ago, while being questioned in a lawsuit accusing him of taking to social media to promote a conspiracy theory falsely identifying a California man as a federal agent posing as a neo-Nazi street brawler, Musk said in sworn testimony he is “guilty of many self-inflicted wounds.”

In the current trial, in which he is accused of instigating Twitter stock price moves that collectively wiped out billions of dollars in equity, Musk said he simply tweets “what’s on my mind and the market decides if it’s material.”

‘Manic Depressive’

He told the jury that “people tend to read too much into things that I do,” and described the stock market as “manic depressive,” pointing out that it can fluctuate.

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.

Despite Musk’s tweet in May 2022 that his takeover 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.

The serial entrepreneur sought to show Wednesday that he was legitimately upset that after offering $54.20 per share to acquire the platform on which he had tens of millions of followers, he couldn’t get a straight answer from Twitter management about how many of its user accounts were fake.

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

Musk Was ‘Stunned’

“At least for me, half of my replies would be crypto spam or things that were unrelated to what I post,” Musk testified. He also accused Twitter leadership of lying about the number of bots on the service, and said he was “stunned” to learn that top company executives allegedly didn’t know how bots were measured.

Musk’s exchanges with Aaron Arnzen, a lawyer for the investors, got testy at times, with the multibillionaire complaining about repetitive questions that he said were “designed to mislead the jury.”

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.

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

“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.

Other Trials

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.

Musk continues to spar with the US Securities and Exchange Commission over the regulator’s allegations that he secretly — and cheaply — stockpiled Twitter shares early in 2022 without disclosing his holdings when they hit a mandatory reporting threshold. Musk has denied wrongdoing. On Wednesday, one of his lawyers told the Washington judge overseeing the case that negotiations continue with the SEC over a possible resolution.

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

--With assistance from Nicola M White.

To contact the reporters on this story:
Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net;
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:
Sarah Frier at sfrier1@bloomberg.net;
Sara Forden at sforden@bloomberg.net

Peter Blumberg, Stephanie Gleason

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