A California civil jury has ruled that Elon Musk intentionally misled investors during his attempt to withdraw from the $44 billion acquisition of Twitter in 2022.
The verdict centers on Musk’s public statements about the number of fake or spam accounts on the platform, which he cited as a reason to pause the deal.
Tweet Triggered Stock Decline And Lawsuit
In May 2022, Musk posted that the Twitter deal was “temporarily on hold” pending verification that fake accounts made up less than 5% of users.
Following the post, Twitter’s share price dropped by around 8%.
Investor Giuseppe Pampena filed a lawsuit on behalf of shareholders who sold stock between May 13 and October 4, when the deal was finalized.
The lawsuit argued that Musk’s statements created uncertainty that pushed the stock price lower, causing financial losses for those investors.
Jury Rejects Musk’s Defense
Musk’s legal team said his comments reflected legitimate concerns about bot activity on the platform.
However, the jury sided with the plaintiffs, concluding that Musk had intentionally misled investors.
The ruling establishes liability, though the exact financial damages have yet to be determined.
Potential Damages Could Reach Billions
According to the plaintiff’s legal team, damages could be as high as $2.6 billion.
While significant, the figure represents a small portion of Musk’s estimated net worth, which exceeds $660 billion.
Part Of A Broader Pattern Of Legal Scrutiny
This is not the first time Musk’s social media posts have drawn legal challenges.
In 2018, he faced action from the Securities and Exchange Commission over tweets claiming he had secured funding to take Tesla private.
Musk ultimately prevailed in a shareholder lawsuit related to that case, but the current ruling marks a different outcome.
Twitter Acquisition Led To Broader Business Changes
After completing the acquisition, Musk rebranded Twitter as X and later merged it with his AI venture, xAI.
He has since taken further steps to integrate his businesses, including combining xAI with SpaceX as part of a broader strategy involving AI and infrastructure development.
The case highlights ongoing scrutiny of how public statements by high-profile executives can influence markets and investor decisions.
Featured image credits: Bret Hartman / TED via Flickr
For more stories like it, click the +Follow button at the top of this page to follow us.