San Francisco Jurors Weigh Musk-Twitter Securities Suit Over $44B Deal

Elon Musk testified Wednesday at the U.S. District Court for the Northern District of California in San Francisco as an eight-person jury weighs a securities class-action tied to his roughly $44 billion agreement to buy Twitter. Plaintiffs allege Musk made false or misleading public statements aimed at driving down Twitter’s stock so he could abandon or renegotiate the $44 billion buyout, which was priced at $54.20 per share.

The lawsuit, filed in October 2022 in the Northern District of California, represents shareholders who sold between May 13 and Oct. 4, 2022. The May 13, 2022 market move is central to the case: Twitter’s stock fell nearly 10% that day after Musk tweeted the deal was “temporarily on hold,” a drop plaintiffs say reflected material market harm to sellers during the class period.

Plaintiffs’ lead counsel Aaron P. Arnzen of Bottini & Bottini opened the case and told jurors at opening arguments Monday, “We are here today because Elon Musk cheated investors to save himself billions of dollars.” The trial is scheduled to continue through March 16, with plaintiffs calling witnesses including Twitter’s former chief legal officer Vijaya Gadde; Gadde’s testimony was reported to continue on Tuesday.

One of the lead plaintiffs, Brian Belgrave, testified after opening arguments and told the jury, “I felt that I got cheated, lied to, and I lost a lot of money.” Defense counsel Stephen Broome of Quinn Emanuel Urquhart & Sullivan twice sought to impeach Belgrave based on notes he wrote when he first bought Twitter stock on May 13, but those impeachment attempts were reported as unsuccessful in court.

When Musk took the stand Wednesday, plaintiffs’ questioning focused on the May 13 tweet and whether Musk considered its market impact. Musk answered, “I was simply speaking my mind,” and told the court that he “made it explicit at the time that he was committed to the deal” and that saying the deal was “temporarily on hold” was “like saying you're going to be late for a meeting. (It doesn't) mean you are not going to be at the meeting.” Musk also said, “I can’t control whether people sell their stock, but everyone who held the stock fared extremely well,” and acknowledged that his frequent posts on social media “probably reveal too much about what is going on in his mind.”

Defense lawyer Lifrak told jurors Musk would “take the stand like any other witness, he will look you in the eye and tell you that this was no scheme to lower Twitter stock price to try to get a better deal in the transaction price.” U.S. District Judge Charles R. Breyer, a Bill Clinton appointee, is presiding over the case before the eight-person jury.

The trial sits alongside wider questions about Musk’s business dealings and public comments; Musk’s fortune is now estimated at $841 billion, and he previously spent about eight hours testifying in a San Francisco federal trial over a proposed 2018 Tesla buyout that ended with a nine-member jury absolving him of wrongdoing. Photographs credited to Godofredo A. Vásquez show Musk arriving at the federal courthouse in San Francisco on Wednesday, March 4, as the trial proceeds through mid-March.