Closing arguments begin Tuesday in a San Francisco civil trial brought by Twitter shareholders who say Elon Musk engaged in a pattern of deceptive conduct that misled investors as he tried to abandon his $44 billion purchase of the company now renamed X. The suit, filed just before Musk took control of the platform in October 2022, accuses him of misleading statements and tactics during the six months after he agreed to buy Twitter for $54.20 a share.
Much of the trial has focused on disputes about Twitter’s estimate of fake and spam accounts. Musk has long maintained the company understated the number of bots on the service, arguing the true share was far higher than the roughly 5 percent figure disclosed in regulatory filings. He cited that alleged misrepresentation as a key reason for attempting to back out of the deal.
After Musk sought to cancel the acquisition, Twitter sued in Delaware to force him to close the transaction. Musk ultimately reversed course and completed the purchase at the agreed price.
The bot count issue has a prior history: in 2021 Twitter paid $809.5 million to settle claims it had overstated growth and monthly user figures, and the company had repeatedly warned the SEC that its published bot estimates might understate the true level of spam. Some analysts and Musk suggested the percentage of fake accounts could be 20 percent or higher, while former Twitter CFO Ned Segal testified the figure was closer to 1 percent.
Segal also told the court that Twitter did not file false SEC reports about its spam counts, though he acknowledged the company once restated results after uncovering a 2017 error that had inflated monthly user figures by including users of a third-party app it should not have counted.
In advance of closing statements, the court reviewed jury instructions. Judge Charles R. Breyer noted that many prospective jurors held negative views of Musk but emphasized that an unpopular figure must still receive a fair trial and that jurors must set aside prejudices when weighing the evidence.