Stock Tanked 40%—Courtroom Testimony ERUPTS

Person in front of falling stock market graph.

Elon Musk’s defiant courtroom testimony could decide if his tweets tanked Twitter’s stock value by 40%, handing shareholders massive losses—or if he exposed real corporate fraud.

Story Snapshot

Musk agreed to buy Twitter for $44 billion in April 2022, then tweeted doubts about bot accounts, crashing the stock nearly 40% before completing the deal.
Class-action lawsuit accuses him of securities fraud via misleading statements from May to October 2022, filed right after deal closure.
Musk testified March 3-4, 2026, in San Francisco, calling Twitter’s bot data “BS” and denying manipulation intent.
Case now with jury through March 19, 2026; outcome may set precedent for executive social media use.

Deal Agreement Sparks Immediate Turmoil

Elon Musk signed a binding agreement on April 25, 2022, to purchase Twitter for $44 billion at $54.20 per share. He waived standard due diligence, including on bot account verification. Twitter had disclosed about 5% fake accounts in SEC filings, but settled an $809.5 million lawsuit in 2021 for overstating user growth. Musk began buying shares quietly earlier that year; public announcement spiked stock 27%.

Tweets Trigger Stock Plunge

On May 13, 2022, Musk tweeted the deal was “temporarily on hold” over bot verification needs. Twitter stock dropped nearly 10% that day. Late May, he declared the deal “cannot go forward,” estimating 20% fake accounts. By July 8, announcing abandonment, shares hit $36.81—32% below offer price. No merger clause supported his unilateral pause.

Lawsuit Emerges After Deal Completion

Musk reversed course October 4, 2022, completing the purchase at original terms. Shareholders who sold between May 13 and October 4 filed class-action suit that day, claiming Musk’s tweets violated securities laws by artificially depressing price. They sold during a “limbo” when stock fell ~40% below offer. Twitter’s pre-deal board sued Musk in Delaware to enforce agreement; he countersued alleging bot fraud.

Musk’s Courtroom Defense Unfolds

Trial opened in U.S. District Court, Northern District of California, before Judge Charles Breyer. Musk testified March 3-4, 2026, defending tweets as honest concerns. He called Twitter’s 5% bot figure “BS,” admitted frustration with board, and explained deal finish via lawyer advice on Delaware judge bias. Musk insisted no market manipulation; tweets gave shareholders “windfall.”

Plaintiffs Counter with Manipulation Claims

Shareholders, led by lawyer Aaron P. Arnzen, argue Musk’s statements were calculated to devalue stock for renegotiation or exit. Unlike 2018 Tesla “funding secured” tweets—where jury acquitted him—this case spotlights post-offer pattern during binding period. Musk’s $841 billion net worth dwarfs collective plaintiff losses, but facts show direct stock ties to his posts. Common sense aligns with Musk: Twitter’s bot history raises legitimate doubts, waiver or not.

Jury Weighs Precedent-Setting Verdict

Post-testimony, case went to jury deliberation, running through March 19, 2026. Judge Breyer considers privilege lift on Musk’s bias claims against Delaware’s Kathleen St. Jude McCormick. Short-term, liability hits Musk’s finances amid Tesla/X roles. Long-term, verdict scrutinizes CEO tweets in M&A, amplifying bot debates and social media disclosure standards.