A federal jury in San Francisco found Elon Musk liable for misleading Twitter investors by deliberately driving down the company's stock price during his 2022 acquisition of the social media platform for $44 billion. The nine-person jury returned its verdict after nearly four days of deliberation, nearly three weeks after the trial began on March 2. While the jury absolved Musk of scheming to defraud investors, it found him responsible for false statements that artificially depressed Twitter's share price.
The damages awarded by jurors ranged between $3 and $8 per share per day, which plaintiffs' lawyers estimated totals approximately $2.1 billion. The verdict marks a rare legal defeat for the billionaire, who was cleared in 2023 of similar charges brought by Tesla shareholders over his 2018 tweets about taking the automaker private.
The civil trial centered on a class-action lawsuit filed just before Musk took control of Twitter, which he later renamed X. Jurors were asked whether two tweets and comments Musk made on a podcast in May 2022 amounted to intentionally defrauding shareholders who sold their shares based on his statements.
However, jurors determined that a statement he made on a podcast did not constitute misleading conduct because it was an opinion. The lawsuit covered investors who sold Twitter shares at artificially depressed prices between May 13 and October 4, 2022.
Much of the nearly three-week trial focused on Musk's claims about the number of bots on Twitter. Musk testified that Twitter had a significantly higher number of fake and spam accounts than the 5 percent it disclosed in regulatory filings. He maintained that Twitter's leadership lied about the amount of bots on the platform and withheld information about how the number of fake accounts was calculated.
Former Twitter executives testified during the trial, including CEO Parag Agrawal and CFO Ned Segal. Musk spent more than a day on the stand, where he repeatedly described Twitter's information as inaccurate. When asked about his characterization of Twitter's calculations, Musk said, "I did make it clear that I thought it was BS."
Plaintiffs' lawyers argued that as Tesla's stock price declined and buying Twitter became too expensive, Musk tweeted statements designed to drive down Twitter's stock price so he could renegotiate the deal for a lower price or escape it entirely. In closing arguments, Mark Molumphy, a lawyer for the plaintiffs, told jurors that Musk's tweets were not "innocent mistakes" or "stupid tweets" but carefully calculated to depress Twitter's share price.
Twitter's shares fell below $33, approximately 40 percent below Musk's original purchase price, while the deal hung in limbo. That downturn cost shareholders who sold during the uncertainty caused by what the lawsuit alleged was Musk's deceitful behavior.
After Musk tried to back out of the Twitter purchase, Twitter went to court in Delaware to force him to honor his original deal. Just before that case was scheduled to go to trial, Musk reversed course and agreed to pay what he had originally promised. He completed the acquisition in October 2022.
Brian Belgrave, a small-business owner from Oregon who led the class-action lawsuit, sold thousands of Twitter shares in July 2022, believing Musk was no longer going to buy the platform based on his public posts. Belgrave's sale price was less than what he paid a few months earlier and significantly less than the $54.20 per share Musk eventually paid. "I got screwed," Belgrave told the jury. "I got cheated."
Joseph Cotchett, an attorney for the plaintiffs, called the verdict "an important victory, not just for investors of Twitter, but for the public markets." He added that it "sends a strong message that just because you're a rich and powerful person, you still have to obey the law, and no man is above the law."
Musk's lawyers at Quinn Emanuel Urquhart & Sullivan characterized the verdict as "a bump in the road" and said they look forward to vindication on appeal. Minutes after the judgment was announced, they stated their client would appeal the decision. Musk's legal team declined to comment as they left the courtroom.
A federal jury in San Francisco found Elon Musk liable for misleading Twitter investors by deliberately driving down the company's stock price during his 2022 acquisition of the social media platform for $44 billion. The nine-person jury returned its verdict after nearly four days of deliberation, nearly three weeks after the trial began on March 2. While the jury absolved Musk of scheming to defraud investors, it found him responsible for false statements that artificially depressed Twitter's share price.
The damages awarded by jurors ranged between $3 and $8 per share per day, which plaintiffs' lawyers estimated totals approximately $2.1 billion. Musk's current fortune stands at roughly $814 billion, much of it tied up in Tesla shares. The verdict marks a rare legal defeat for the billionaire, who was cleared in 2023 of similar charges brought by Tesla shareholders over his 2018 tweets about taking the automaker private.
The civil trial centered on a class-action lawsuit filed just before Musk took control of Twitter, which he later renamed X. Jurors were asked whether two tweets and comments Musk made on a podcast in May 2022 amounted to intentionally defrauding shareholders who sold their shares based on his statements.
The jury found Musk liable for misleading investors with two tweets, including one posted on May 13, 2022, stating the Twitter deal was "temporarily on hold." However, jurors determined that a statement he made on a podcast did not constitute misleading conduct because it was an opinion. The lawsuit covered investors who sold Twitter shares at artificially depressed prices between May 13 and October 4, 2022.
Much of the nearly three-week trial focused on Musk's claims about the number of bots on Twitter. Musk testified that Twitter had a significantly higher number of fake and spam accounts than the 5 percent it disclosed in regulatory filings. He maintained that Twitter's leadership lied about the amount of bots on the platform and withheld information about how the number of fake accounts was calculated.
Former Twitter executives testified during the trial, including CEO Parag Agrawal and CFO Ned Segal. Musk spent more than a day on the stand, where he repeatedly described Twitter's information as inaccurate. When asked about his characterization of Twitter's calculations, Musk said, "I did make it clear that I thought it was BS."
Plaintiffs' lawyers argued that as Tesla's stock price declined and buying Twitter became too expensive, Musk tweeted statements designed to drive down Twitter's stock price so he could renegotiate the deal for a lower price or escape it entirely. In closing arguments, Mark Molumphy, a lawyer for the plaintiffs, told jurors that Musk's tweets were not "innocent mistakes" or "stupid tweets" but carefully calculated to depress Twitter's share price.
The jury found that Musk violated a securities rule barring false and misleading statements that artificially drive down a stock price. Twitter's shares fell below $33, approximately 40 percent below Musk's original purchase price, while the deal hung in limbo. That downturn cost shareholders who sold during the uncertainty caused by what the lawsuit alleged was Musk's deceitful behavior.
After Musk tried to back out of the Twitter purchase, Twitter went to court in Delaware to force him to honor his original deal. Just before that case was scheduled to go to trial, Musk reversed course and agreed to pay what he had originally promised. He completed the acquisition in October 2022.
Brian Belgrave, a small-business owner from Oregon who led the class-action lawsuit, sold thousands of Twitter shares in July 2022, believing Musk was no longer going to buy the platform based on his public posts. Belgrave's sale price was less than what he paid a few months earlier and significantly less than the $54.20 per share Musk eventually paid. "I got screwed," Belgrave told the jury. "I got cheated."
Joseph Cotchett, an attorney for the plaintiffs, called the verdict "an important victory, not just for investors of Twitter, but for the public markets." He added that it "sends a strong message that just because you're a rich and powerful person, you still have to obey the law, and no man is above the law."
Musk's lawyers at Quinn Emanuel Urquhart & Sullivan characterized the verdict as "a bump in the road" and said they look forward to vindication on appeal. Minutes after the judgment was announced, they stated their client would appeal the decision. Musk's legal team declined to comment as they left the courtroom.
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