Elon Musk Faces Shareholder Lawsuit Over Alleged Twitter Stock Manipulation
SAN FRANCISCO / LONDON (Archynewsy.com) – Elon Musk is currently defending himself against allegations of stock manipulation related to his acquisition of Twitter, now known as X. Shareholders claim the billionaire intentionally drove down the company’s share price through misleading statements before ultimately purchasing the platform for $44 billion in 2022.
The Core of the Lawsuit
The lawsuit, initially filed in October 2022 in the U.S. District Court for the Northern District of California, alleges that Musk violated federal securities laws by making false and misleading public statements. These statements, according to the plaintiffs, were “carefully calculated to drive down the price of Twitter stock” . The case centers on the period between May 13 and October 4, 2022, when shareholders sold their stock.
Musk’s Initial Offer and Subsequent Doubts
In April 2022, Musk reached an agreement to acquire Twitter for $44 billion, intending to take the company private. However, in May 2022, he announced that the deal was “temporarily on hold” pending verification of the number of spam and fake accounts on the platform. This announcement led to a significant decline in Twitter’s stock price .
Musk further escalated concerns by tweeting that the deal “cannot go forward” and claiming that approximately 20% of Twitter accounts were “fake” . The lawsuit contends that Musk’s May 13th tweet – “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users” – was demonstrably false, as Twitter had not agreed to pause the deal and the merger agreement did not allow for such a unilateral hold.
Allegations of Misleading Statements and Market Manipulation
The plaintiffs argue that Musk continued to make false and disparaging statements about Twitter’s business in the weeks following his initial announcement, further depressing the company’s stock price. Despite these attempts to delay or abandon the acquisition, Musk ultimately completed the purchase in October 2022. Following the takeover, he implemented substantial changes, including significant workforce reductions and the rebranding of the platform to X in July 2023.
Musk Takes the Stand
As of Wednesday, March 4, 2026, Elon Musk is expected to testify in the shareholder trial taking place in San Francisco . A “decoy” Tesla was reportedly used to distract photographers as he entered the courthouse .
The outcome of this trial could have significant implications for Musk and potentially set a precedent for future acquisitions involving public statements and market influence.