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Closing arguments concluded Tuesday in a San Francisco civil trial that put Elon Musk at odds with Twitter shareholders who say he deceived investors as he tried to back out of his $44 billion deal to buy the social media company in 2022, according to the Associated Press. The case now goes to eight jurors, who will decide whether Musk is liable for defrauding investors with tweets and other statements made during the months leading up to his acquisition attempt.
The lawsuit is a class action filed just before Musk took control of Twitter—later renamed X—in October 2022, about six months after he agreed to buy the company for $44 billion, or $54.20 per share. The plaintiffs’ theory is tied to a timeline of public comments that they contend helped move Twitter’s stock while Musk negotiated to retreat from the deal.
Much of the courtroom focus centered on Twitter’s disclosures about the proportion of fake or spam accounts on the platform and on what Musk claimed those estimates meant for his decision-making. Musk testified, as he has long argued, that Twitter’s disclosed percentage of fake accounts understated the reality, and he pointed to the company’s regulatory disclosures as support for his contention that he was reacting to misrepresentation.
Mark Molumphy, a lawyer for the plaintiffs, told jurors that they should hold Musk responsible and compensate investors who lost money because of tweets and statements made during the negotiation period. Molumphy asked the jurors to focus on Musk’s communications, including one from May 13, 2022, when Musk tweeted that the deal was “on hold.”
Molumphy argued that the tweets were not merely mistakes, but part of a strategy that would help reduce the price—or give Musk a path to exit—if buying Twitter became too expensive. He urged the jury to view the public posts as calculated moves tied to the timing of Tesla’s stock decline and the increasing cost of the acquisition.
Musk’s defense sharply disputed that characterization, saying the plaintiffs did not prove that Musk intentionally set out to manipulate Twitter’s stock. Michael Lifrak, a lawyer for Musk, countered that the plaintiffs did not present “one shred of evidence” showing Musk purposely plotted to drive down Twitter’s stock price, and Lifrak said the jurors’ instructions require more than motive or intent to establish actual fraud.
Lifrak also told jurors there was “zero evidence” that Tesla’s stock price decline during the period Musk was working to buy Twitter was the issue. He said everyone “wants to pay less and not more,” and argued jurors could not simply infer fraud from the desire for a lower price.
In addition to the overall securities-fraud theory, the trial leaned on what the parties said the record shows about bots and fake accounts at the time Musk negotiated the purchase. The problem, according to the testimony described in the AP report, was not new when Musk made his deal decision: Twitter had previously paid $809.5 million in 2021 to settle claims related to overstating growth rates and monthly user figures, and it had also disclosed bot estimates to the Securities and Exchange Commission for years while cautioning that its estimate might be too low.
Musk’s position was that the bot number was at least 20% according to some analysts, while Twitter’s former CFO Ned Segal disputed that characterization. The AP report says Segal testified that Twitter’s number was actually closer to 1% and said Twitter had not filed false filings to the SEC about spam numbers, though he noted Twitter had restated its finances in 2017 after it learned of an error related to its calculation of daily users.
Molumphy showed jurors tweets Musk sent before he agreed to buy Twitter, including posts in 2020 complaining about the number of fake accounts on the platform. The plaintiffs also referenced Musk’s testimony from last week, in which, when asked whether he thought Twitter was “exaggerating” its user numbers before signing the deal, Musk replied, “Yes.”
Lifrak treated the May 13 “on hold” tweet as central to the dispute over whether Musk made a false statement. In his closing, Lifrak used visual aids to contrast who the plaintiffs said believed the tweet was false at the time with those who said so at trial, and Lifrak argued that the presentation of the tweet did not support a finding of fraud.
Lifrak also urged jurors not to be influenced by animosity toward Musk or by what he described as a “San Francisco us vs. Elon Musk dynamic.” “He may tweet stupid things,” Lifrak said, adding, “But this isn’t a stupid tweeter trial,” and arguing instead that it is a trial about whether securities fraud was committed and whether the plaintiffs proved it.
Before closing arguments, the two sides met to go over jury instructions, and the judge—Charles R. Breyer—acknowledged that some potential jurors had negative views of Musk. Breyer noted that a person who is “not universally liked” still deserves a fair trial and should not be treated in a prejudicial way, according to the AP report.
Musk, however, has said he was not treated fairly during the proceedings and earlier this month filed a motion for a mistrial, claiming he has been deprived of his right to a fair trial because of the plaintiffs’ and, in some cases, the judge’s conduct, the AP report said.