A civil jury began deliberating Tuesday on whether Elon Musk defrauded Twitter shareholders by using social media posts to drive down the company’s stock price after he signed a $44 billion acquisition agreement he later wanted to escape.
Closing arguments concluded at the US District Court for the Northern District of California (Pampena v. Musk, No. 3:22-cv-05937-CRB), before Judge Charles R. Breyer, capping a weeks-long trial that put the world’s wealthiest person in the position of defending his own tweets as careless rather than calculated.
Plaintiffs’ attorney Mark Molumphy told the jury Musk’s statements — including a May 13, 2022 post declaring the deal “on hold” — were not off-the-cuff errors but a deliberate campaign to push Twitter’s stock lower. “He knew what he was doing,” Molumphy said.
The plaintiffs’ theory is that as Tesla’s stock fell and the $54.20-per-share acquisition grew more expensive relative to Musk’s liquid wealth, he seized on Twitter’s bot and spam account disclosures as a pretext to renegotiate — or exit — the deal.
Defense attorney Michael Lifrak pushed back in kind, telling the jury the plaintiffs had produced “not one shred of evidence” that Musk plotted to manipulate the stock price. “He may tweet stupid things,” Lifrak said. “But this isn’t a stupid tweeter trial.”
To illustrate the point, he used visual aids showing two screens — “People who said the tweet was false at the time:” followed by a blank, and “People who said the tweet was false at the trial:” followed by another blank.
Much of the case turned on the bot question. Musk had argued for years that fake and spam accounts on Twitter vastly outnumbered the 5% the company disclosed in SEC filings — citing figures as high as 20% — and used that claim as his legal justification for attempting to terminate the deal.
Twitter had already paid $809.5 million in 2021 to settle claims it overstated its user growth figures, giving Musk’s bot argument at least a surface-level foundation. Former Twitter CFO Ned Segal testified against it directly, putting the real spam rate at closer to 1% and stating that, to his knowledge, the company had never filed materially false estimates with the SEC.
The bot issue was Musk’s stated basis for trying to walk away. After he attempted to terminate the agreement, Twitter filed suit in Delaware Chancery Court to force him to close. Days before that case was scheduled for trial, Musk reversed course, closed the acquisition in October 2022 at the original price, and later renamed the platform X.
The class-action lawsuit — filed just before Musk took control — argues that shareholders who sold during the period of his statements suffered compensable losses.
Musk’s legal team filed a motion for a mistrial during proceedings, arguing he had been denied a fair hearing due to conduct by plaintiffs’ counsel and, on occasion, the judge. The court did not grant it. Judge Breyer acknowledged that many prospective jurors had entered the pool with negative views of Musk but told the panel that a person who is “not universally liked” is still entitled to a fair trial.
The jury of eight is now deliberating. No timeline for a verdict has been announced.
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