A federal jury in San Francisco has held Elon Musk liable in a civil lawsuit brought by former Twitter shareholders, concluding that two of his public statements in 2022 about the prevalence of bots and spam accounts on the platform misled investors during his high-profile $44 billion acquisition attempt. This verdict represents a significant legal blow to Musk, although the jury stopped short of finding that he orchestrated a broader fraudulent scheme against shareholders.
The crux of the case revolved around whether Musk’s comments during the takeover negotiations were deliberately intended to depress Twitter’s stock price, thereby giving him leverage to renegotiate the terms of the deal or potentially abandon it altogether. Shareholders argued that Musk’s statements unnerved the market and caused them financial harm, as many sold their shares at artificially low prices while the acquisition remained uncertain. The lawsuit specifically covers investors who sold Twitter stock between May 13 and October 4, 2022, a period marked by intense public scrutiny and market volatility.
Two particular statements by Musk proved pivotal in the jury’s decision. After agreeing to purchase Twitter in April 2022, Musk publicly declared that the acquisition was “temporarily on hold” pending verification that fake and spam accounts constituted less than 5 percent of the platform’s users. Later, he suggested the figure could be much higher—possibly exceeding 20 percent—and insisted that the deal could not proceed unless Twitter’s management could prove otherwise. These assertions were found to have misled investors about the platform’s true user base and the viability of the acquisition.
However, the jury did not fully endorse all claims made by the shareholders. It rejected allegations that Musk engaged in a broader, more systematic fraud. This mixed verdict indicates that while the court recognized specific instances of misleading conduct, it did not find sufficient evidence to support the plaintiffs’ argument of an overarching deceptive scheme. This nuanced outcome will likely influence the next stages of litigation and potential settlements.
Legal representatives for the shareholders have estimated that damages could reach approximately $2.5 billion, with some reports citing figures closer to $2.6 billion. The exact amount of compensation is yet to be finalized by the court and will depend on further legal proceedings. This potential financial liability adds considerable pressure on Musk as he navigates the fallout from the case.
In response to the verdict, Musk’s legal team described the decision as merely “a bump in the road” and confirmed their intention to appeal. The trial commenced on March 2, with jurors deliberating for several days before delivering their verdict last Friday. This case adds to a growing list of legal challenges Musk faces related to his public statements and corporate actions.
It is worth noting that Musk has previously been involved in high-profile legal battles, including a notable case over his 2018 “funding secured” tweet about taking Tesla private, which he ultimately won. He has also faced litigation concerning his compensation package at Tesla. Additionally, Musk is currently engaged in settlement discussions with the U.S. Securities and Exchange Commission over allegations that he delayed disclosing his initial purchases of Twitter stock in 2022.
Despite the legal turmoil, Musk completed the Twitter acquisition in October 2022 and subsequently rebranded the platform as “X.” Nevertheless, this recent verdict underscores that the legal and financial repercussions stemming from the tumultuous takeover process continue to unfold, highlighting the ongoing complexities surrounding one of the most watched corporate deals in recent history.
