Elon Musk to face questioning in lawsuit over Twitter buyout flip-flop

Investors claim his flip-flopping on whether to go through with buying Twitter- including his public attacks- cast doubt over whether the deal would close and sunk its stock price

By Malathi Nayak

 

Elon Musk is set to be questioned under oath about his 2022 acquisition of Twitter Inc. in an investor lawsuit alleging that his on-again off-again move to purchase the social media platform was a ruse to lower its stock price. 

After attorneys for the world’s richest person initially balked at making him appear in person for a deposition, Musk has agreed to meet with lawyers for the investors on April 3 in Washington, DC, according to a court filing submitted Friday by lawyers on both sides.

 

While Musk has been busy lately as a key adviser to President Donald Trump on government cost-cutting efforts, he’s also entangled in numerous court fights related to his half dozen companies and personal investments.

 

Investors claim his flip flopping on whether to go through with buying Twitter — including his public attacks on how the platform was managed — cast doubt over whether the deal would close and sunk its stock price, hurting investors, while improving Musk’s bargaining position. Ultimately, Musk completed the $44 billion buyout after he was sued for trying to back out. He later rebranded the company as X Corp.

 

A San Francisco federal judge in December 2023 rejected Musk’s request to dismiss the case, saying that his statements “did give an impression materially different from the state of affairs that existed.”

 

The US Securities and Exchange Commission sued Musk in January, days before Trump was sworn in as president, over claims the billionaire missed a deadline for disclosing his growing stake in Twitter ahead of the acquisition. The agency claims that by stockpiling shares at an unfair discount behind the scenes, Musk cost Twitter shareholders who unwittingly sold too soon more than $150 million.

 

The case is Pampena v. Musk, 22-cv-05937, US District Court, Northern District of California (San Francisco).