Bad: Instagram got a $525 million buyout offer from Twitter three weeks before Facebook offered $1 billion to buy them. They've been publicly denying this fact till now.

Worse: Instagram did not allow Twitter to counter Facebook's offer.

Worst: They lied about it under oath to California Corporations. Motive? To avoid antitrust lawyers sniffing around the Facebook acquisition.

If I were an Instagram shareholder I would be angry about being lied to about this.

Unless Twitter made a binding written offer, Systrom's statements seem defensible. "Talks", even talks that verbally reach tentative numbers, are not necessarily an "offer" in the relevant context.

Potential acquirers can be conflicted themselves, sending mixed signals, either as a negotiating tactic ("my board could still balk at this number") or because of real dissension.

Against that, when you get a definitive offer, way over your target range, perhaps higher than previous talks indicated Twitter would go, from someone with the sole power to make it happen (Zuck), and perhaps even accompanied by an explicit or implicit "no shop" clause... well, the Instagram majority-shareholders/founders should be allowed to take that offer on their own "business judgement".

Unhappy minority shareholders can blot up their tears of anger with hundred-dollar bills, given the spectacular returns the deal gave them.

What I imagine they look like:

You may be right that it's a grey area. Questions:

1. Why is this coming up now instead of earlier when the deal could have been stopped?

2. Why did Instagram walk from Twitter rather than ask them to up their offer?

3. What are the consequences if he is found guilty of perjury? I'm guessing no jail -- Facebook just pays a tiny fine. Slap on the wrists.

(1) Someone (most likely inside Twitter, possibly inside Instagram) may be sore over the outcome, and in CYA mode. (Maybe Instagram pulling their photos from Twitter cards has rubbed salt in the wound.) Seeing Systrom's documented testimony gave them a chance to stir things up with their alternate interpretation of events.

And are you assuming the deal should have been stopped? Twitter made a low verbal offer that Instagram thought about for a while and rejected. Perhaps, that offer even came with "this is about as high as we can go" or "if you say no we're just going to build this ourselves and freeze you out" spin. (Or, maybe Instagram's rejection came with a "we'd need double that" signal and Twitter rolled their eyes.) Then Facebook came along with a dream offer, straight from the CEO.

(2) I'd guess because Instagram had little hope, given their recent talking-numbers with Twitter, that Twitter would offer something anywhere near as rich. Or perhaps they didn't like something else about the Twitter negotiations, or potential future as part of Twitter, that made it less attractive. Perhaps Zuckerburg accepted their first ask, after which it's kind of a dick move to then say, "well, let me check again if I can get more from the people who said no to this same ask before." Or perhaps Zuck's offer had a no-shop clause. Lots of plausible reasons.

(3) Perjury needs a pretty-clear-cut case and a prosecutor/official angry enough to pursue it. It'd also require evidence beyond anonymous gripes from people "concerned about legal repercussions" about their own breaking of confidences. I'd predict no prosecution.

I'm thinking antitrust might have felt differently if they knew other companies were interested in Instagram. But that's pure speculation. Now we'll never know, because I suspect you're right that no one was angry enough to pursue this.

It's interesting now to think about whether Twitter would have rolled out the policy changes that Facebook did about Instagram account sharing and using Instagram images in ads.

Note that this story is about testimony in a different forum, the California Corporations Department. That forum was only looking at whether the deal was fair to Instagram's 19 shareholders. It contacted all 19 shareholders in that process.

Federal antitrust regulators (and those in other countries) separately looked at the deal. They would have to have been idiots to not know other companies were interested. Twitter's interest was reported at the time of the deal, and the theory of the high price was that Instagram could be bought by some other company to challenge Facebook. Those regulators weren't relying on California Corporations Department testimony for their research.

And if they needed to know more about Twitter's interest and competitive concerns, they would have (and almost certainly did) talk to Twitter directly. So we know exactly what antitrust regulators thought, knowing Instagram was a hot company with acquisition interest from multiple places. They thought the deal was OK to go forward.