Elon Musk Defends Actions in Twitter Acquisition amidst Lawsuit
Elon Musk is currently defending his actions in the lead-up to his acquisition of Twitter, now rebranded as X, as he faces a class-action lawsuit in a San Francisco court. The legal proceedings involve accusations that Musk misled investors, resulting in significant financial losses for them.
Details of the Class Action Lawsuit
At the heart of the trial is a lawsuit filed just before Musk’s takeover of Twitter in October 2022. The deal, valued at $44 billion or $54.20 per share, was finalized six months after Musk initially agreed to purchase the company. The lawsuit represents shareholders who sold Twitter stock between May 13 and October 4, 2022. They claim that Musk breached federal securities laws through strategic maneuvers intended to depress Twitter’s stock price, either to derail the acquisition or to negotiate a lower sales price.
Musk’s Defense on Bot Accounts
During his second day on the witness stand, Musk reiterated his position that Twitter had a significantly higher number of fake and spam accounts than the 5% reported in regulatory filings. The prevalence of bots and fake accounts was a known issue when Musk negotiated the deal. In 2021, Twitter had settled for $809.5 million over claims it exaggerated its growth and user numbers. Furthermore, Twitter had consistently provided bot estimates to the Securities and Exchange Commission, although it cautioned that these estimates might be underestimated.
Discrepancy in Bot Estimates
Musk, along with some external analysts, argues that the actual number of fake accounts was much higher, estimating it to be at least 20%. Musk equated acknowledging this figure to “saying the grass is green or the sky is blue.”
For more details, refer to the full AP News article and further information on the issue of bots and fake accounts on Twitter.
