Elon Musk Takes the Stand in High-Stakes Twitter Trial
Elon Musk arrived at federal court in San Francisco, California, on March 4, 2026, to testify in a civil trial that could have significant financial and legal repercussions. The billionaire is facing allegations from Twitter investors who claim he manipulated the social media company's stock price prior to his acquisition in 2022, in a case that delves into the intersection of corporate power and market influence.
Allegations of Securities Fraud and Stock Price Manipulation
According to the class-action lawsuit, Musk is accused of committing securities fraud by publicly deriding Twitter to artificially depress its stock value, enabling him to purchase the company at a bargain. Investors argue that after agreeing to buy Twitter, Musk engaged in months of waffling and attacks, with the intent to lower the share price and secure a better deal. Despite contentious legal battles, Musk ultimately completed the purchase at his original offer of $54.20 per share, totaling approximately $44 billion.
His legal team has countered these claims, asserting that Musk had no intention to harm investors or manipulate stock prices, and that his criticisms of Twitter were based on genuine concerns.
Musk's Testimony and Market Dynamics
During proceedings on Monday, Musk was questioned by investors' attorneys about whether he was aware that his public statements could influence Twitter's stock prices. In response, Musk described the stock market as "like a manic depressive," noting that his tweets sometimes had unexpected effects on share values. He acknowledged that while his posts occasionally aligned with market expectations, they could also produce opposite outcomes.
Throughout 2022, Musk frequently posted to his millions of followers, alleging that Twitter was plagued by bots and fake accounts. At one point, he tweeted that at least 20% of accounts were fraudulent, threatening to halt the deal if the company could not prove otherwise. These statements are central to the plaintiffs' case, as they allegedly contributed to stock volatility and investor losses.
Trial Proceedings and Legal Arguments
The trial is being held in federal court under Judge Charles Breyer, with jury selection revealing strong negative opinions of Musk among nearly half of the prospective jurors. In opening statements, Mark Molumphy, a lawyer for the plaintiffs, asserted that "Elon Musk cheated investors," promising evidence of intentional misconduct. Conversely, Musk's attorney, Michael Lifrak, defended the billionaire's actions, stating that his complaints about Twitter were legitimate and not fraudulent.
Plaintiffs focus on a six-month period from April to October 2022, alleging that Musk aimed to pressure Twitter's board into selling at a lower price. When Musk indicated in May 2022 that he was backing out of the purchase and putting it "temporarily on hold," Twitter's shares plummeted by up to 20%, remaining unstable for months. Investors involved in the lawsuit claim they sold shares below $54.20, fearing the deal would collapse.
Broader Implications and Musk's Business Moves
If the jury rules in favor of the investors, Musk could be required to compensate them for reported losses, and the decision might influence other pending lawsuits, including one from the U.S. Securities and Exchange Commission alleging disclosure violations. Musk has consistently denied any wrongdoing, placing the burden on investors' lawyers to prove intentional manipulation.
Since acquiring Twitter in 2022, Musk took the company private, renamed it X, and last year merged it with his artificial intelligence firm, xAI, before integrating both under SpaceX. As the world's richest person with an estimated net worth exceeding $800 billion, Musk plans to take SpaceX public this year in what is projected to be a record initial public offering, with private investors valuing his conglomerate at $1.25 trillion.
The trial is expected to last two to three weeks, with outcomes closely watched by financial and legal communities for potential precedents in securities law and corporate governance.
