Elon Musk testifies in Twitter takeover investor trial

Elon Musk took the witness stand on Wednesday in a San Francisco federal courtroom in a class-action case accusing him of securities fraud during his 2022 bid for Twitter, now X. According to The Guardian, investors claim Musk’s public attacks on the company—especially repeated claims about bots—helped drive down the share price while he sought better terms, even as he ultimately closed the deal at $54.20 a share.

The lawsuit sits in a grey zone that modern markets have largely avoided formalising: when a CEO, celebrity, or would-be acquirer can move prices with a sentence, where does “commentary” end and market manipulation begin. Plaintiffs say they sold shares below the offer price during the months when Musk publicly suggested the deal was “on hold” or potentially dead; Twitter’s stock at times fell sharply after such statements, The Guardian reports. Musk’s lawyers argue his complaints were genuine—an important detail, because intent is the hinge between a buyer voicing doubts and a buyer trying to manufacture them.

The deeper consequence is not only whether Musk pays damages, but what courts implicitly price into speech. If juries start treating public posts as quasi-regulated disclosures, the rational response is fewer posts, more lawyers, and more “safe” language—exactly the opposite of what markets claim to reward: rapid incorporation of new information. The trial also highlights a structural asymmetry: retail shareholders bear volatility in real time, while a buyer with financing, optionality, and publicity can wait out the turbulence. The Guardian notes the case is being heard under Judge Charles Breyer and that jury selection surfaced unusually strong views about Musk, with many prospective jurors dismissed.

The timing matters because Musk’s corporate structure has become more entangled since the Twitter purchase. The Guardian reports that X was merged with xAI and placed under SpaceX, and that Musk is expected to take SpaceX public this year—an IPO that, if it proceeds, will pull the same personality-driven communications problem into a far larger pool of public shareholders. A verdict that treats acquirer rhetoric as compensable harm would not just discipline Musk; it would invite similar claims against any high-profile bidder who negotiates in public.

Musk told the court that “the stock market is like a manic depressive,” according to CNBC as cited by The Guardian. The judge and jury now have to decide whether that volatility is simply the cost of trading in liquid markets—or something that can be billed back to the person who knows how to trigger it.