A California jury has ruled that Elon Musk misled investors during his high-profile 2022 acquisition of Twitter. The decision follows a multi-week civil trial in San Francisco that examined whether Musk’s public statements—including tweets and media appearances—improperly influenced Twitter’s stock price during the months leading up to the $44 billion buyout.
Jury Finds Misleading Statements, But No Fraud Scheme
After several days of deliberation, the nine-member jury concluded that two of Musk’s tweets from May 2022 were “materially false or misleading.” Among them was his widely publicized statement that the Twitter acquisition was “temporarily on hold,” which coincided with a sharp drop in the company’s share price.
However, the jury stopped short of finding that Musk engaged in a deliberate scheme to defraud investors. It also determined that comments he made during a podcast interview did not meet the threshold for liability. (via CNBC)
This split verdict highlights that while Musk’s communications were deemed misleading, they were not part of a coordinated effort to manipulate the market.
Billions in Potential Damages
The case was brought as a class-action lawsuit on behalf of Twitter shareholders who sold stock during the volatile period between May and October 2022. Plaintiffs argued they suffered financial losses after reacting to Musk’s statements about bots, spam accounts, and the status of the deal.
Legal experts involved in the case estimate potential damages could reach into the billions, with some projections as high as $2.5 billion to $2.6 billion. The jury indicated that Musk’s statements may have reduced Twitter’s share price by between $3 and $8 per share during key trading periods.
Because the case involves a large class of investors, the final compensation process could take months to organize and distribute.
Focus on Bots and Deal Uncertainty
A central issue in the trial was Musk’s repeated claims that Twitter had significantly underreported the number of fake or spam accounts on its platform. Musk argued these concerns justified his attempts to pause—or even withdraw from—the acquisition.
At one point, Musk said the deal could not proceed without verification of Twitter’s user metrics, fueling uncertainty among investors. That uncertainty contributed to stock volatility and prompted some shareholders to sell at prices well below the agreed acquisition price of $54.20 per share.
Despite those concerns, Musk ultimately completed the acquisition after Twitter pursued legal action in Delaware to enforce the original agreement.
Appeals Expected
Musk’s legal team has already indicated plans to challenge the verdict. In a statement, his attorneys described the outcome as “a bump in the road” and expressed confidence in a future appeal.
