Elon Musk Defends Tweets in Lawsuit Over Alleged Impact on Twitter Stock Price Before Acquisition

Twitter Class Action Lawsuit Update

Case Overview A class action lawsuit against Elon Musk and Twitter is ongoing in San Francisco court. The case centers on allegations that Musk misled investors and caused them to lose millions of dollars.

Background The lawsuit was filed just before Musk took control of Twitter in October 2022, six months after agreeing to buy the social media service for $44 billion (or $54.20 per share). The case represents Twitter shareholders who sold the stock between May 13 and October 4, 2022.

Key Allegations The lawsuit claims that Musk violated federal securities laws by taking steps to drive down Twitter's stock price. Musk is defending his actions, asserting that Twitter had a much higher number of fake and spam accounts than the 5% disclosed in regulatory filings. Musk believes the actual number of bots was at least 20%.

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Context Twitter had previously settled claims of overstating its growth rate and monthly user figures for $809.5 million in 2021. The company had also disclosed its bot estimates to the Securities and Exchange Commission for years, while cautioning that its estimate might be too low.