Closing arguments begin Tuesday in a San Francisco civil trial in which Twitter shareholders accuse Elon Musk of a pattern of deceptive conduct that misled investors as he tried to back out of his $44bn purchase of the company now renamed X.
The class-action suit was filed shortly before Musk took control of Twitter in October 2022, six months after agreeing to buy it for $54.20 a share. Much of the trial has centered on disputes over the platform’s level of fake and spam accounts. Musk has long maintained Twitter understated the number of bots — he says it was far higher than the roughly 5 percent figure disclosed in regulatory filings — and used that alleged misrepresentation as a reason to retreat from the deal.
After Musk sought to cancel the purchase, Twitter sued in Delaware to force him to complete the transaction. Musk ultimately reversed course and proceeded with the acquisition at the agreed price.
The bot issue was not new: Twitter paid $809.5m in 2021 to settle claims it had overstated growth and monthly user figures, and it had for years told the SEC its bot estimate might be understated. Some analysts and Musk suggested the true share of fake accounts could be 20 percent or more; Twitter’s former CFO Ned Segal testified the figure was closer to 1 percent.
Segal said Twitter did not file false SEC reports about its spam counts, though the company once restated results after discovering a 2017 error that had inflated monthly user numbers by including users of a third‑party app it should not have counted.
On Monday, the court reviewed jury instructions. Judge Charles R. Breyer acknowledged many in the jury pool held negative views of Musk but stressed that an unpopular person still deserves a fair trial and must not be judged prejudicially.