Musk Admits Twitter Posts Were ‘Not My Wisest’ in Securities Fraud Trial

Elon Musk conceded in federal court Wednesday that his May 2022 tweet declaring the Twitter deal ‘temporarily on hold’ may not have been his ‘wisest’ social media post, marking a rare public acknowledgment of poor judgment in a securities fraud trial examining whether his statements drove down the company’s stock price.

The admission came during testimony in a class-action lawsuit filed on behalf of Twitter shareholders who sold stock between May 13 and October 4, 2022, weeks before Musk completed the $44 billion acquisition at $54.20 per share. According to Bloomberg Law, when pressed by plaintiffs’ attorney about whether the post was ill-advised, Musk said: “It may not be my wisest tweet. I don’t know if I would call it my stupidest. But if it led to this trial it probably qualifies as such.”

The lawsuit alleges that Musk violated federal securities laws by making false statements designed to drive down Twitter’s stock price, giving him leverage to renegotiate or abandon the deal he signed in April 2022. Twitter’s stock fell nearly 10% on May 13 after Musk tweeted the deal was on hold pending verification of spam account data. By the time the deal hung in limbo, shares had dropped to $33—roughly 40% below the acquisition price—costing shareholders who sold during the uncertainty billions in losses.

The Core Allegation: Calculated Manipulation

Plaintiffs contend that Musk’s May 13 tweet—declaring the deal “temporarily on hold” over bot account concerns—was materially false because he had no authority under the merger agreement to pause the transaction. The lawsuit claims Musk violated federal securities laws with statements “carefully calculated to drive down the price of Twitter stock.” Attorney Aaron Arnzen argued that subsequent tweets in following weeks, including claims that nearly 20% of accounts were fake, constituted a scheme to either escape the deal or force a price reduction.

Musk defended his actions on the stand, repeatedly stating he was “simply speaking my mind” and that he couldn’t control market reactions. According to Bloomberg Law, he told the jury he tweets “what’s on my mind and the market decides if it’s material,” describing the stock market as “manic depressive.” He maintained that Twitter’s board misled him about bot prevalence, justifying his public complaints despite having waived due diligence when he made his “take it or leave it” offer.

Pattern of Behavior Under Scrutiny

The trial marks Musk’s second Securities Fraud defense in San Francisco federal court in three years. In 2023, a jury cleared him of wrongdoing in a lawsuit over his 2018 “funding secured” tweet about taking Tesla private at $420 per share—a deal that never materialized. That tweet resulted in a $20 million SEC fine, forced removal as Tesla chairman, and requirements that company lawyers pre-approve material tweets.

The current case faces a higher evidentiary bar. Unlike the Tesla trial, this lawsuit includes a documented paper trail of Musk’s evolving statements and the SEC’s parallel investigation. Separately, the SEC has accused Musk of violating disclosure laws by failing to report his Twitter stake within required timeframes in early 2022, allegedly allowing him to purchase additional shares at artificially low prices and underpaying by at least $150 million. Negotiations for a settlement in that case are ongoing.

Legal Precedent at Stake

The case presents novel questions about how courts should interpret Social Media statements by executives during active M&A transactions. While the “funding secured” precedent established that false material statements can trigger liability, that case involved a proposed deal that never happened. Here, Musk ultimately paid the original price, complicating damages calculations.

Musk argued that completing the deal at $54.20 “provided a huge windfall for most Twitter shareholders,” telling the court he couldn’t control whether individuals chose to sell. But shareholders who sold during the uncertainty between May and October 2022 received far less, with some exiting positions when shares traded below $33. The lawsuit notes that Twitter had previously paid $809.5 million in 2021 to settle claims it overstated user figures—making Musk’s bot complaints about a known, disclosed issue.

What to Watch

Musk returns to the stand Thursday to continue testimony in the trial, which is scheduled through March 19 before U.S. District Judge Charles Breyer. The jury must determine whether Musk’s statements were not only false but made with intent to deceive—a high bar in securities litigation. A verdict against Musk could force him to compensate shareholders for losses, though the exact damages remain unclear. The case also establishes parameters for how CEO social media activity during acquisitions will be judged going forward.

Beyond this trial, Musk faces the separate SEC enforcement action over late disclosure of his Twitter stake. His attorney told the Washington judge overseeing that case Wednesday that settlement negotiations continue. If both cases result in adverse findings, they would create a pattern of securities violations that could invite enhanced regulatory scrutiny of Musk’s future public statements—a significant constraint for an executive whose companies rely heavily on his personal brand and market-moving pronouncements.