Highlights:
- Jury found Musk’s 2022 tweets about Twitter deal misleading
- Ruling could result in roughly $2.6 billion in damages
- Case filed by shareholders who sold stock during deal period
- Musk’s legal team plans to appeal the decision
- Marks a rare courtroom setback for the billionaire entrepreneur
A federal jury in California has determined that Elon Musk misled Twitter shareholders during his 2022 effort to acquire the social media platform, a ruling that could cost the billionaire entrepreneur billions of dollars in damages. The verdict stems from a class action securities lawsuit centered on Musk’s public statements about the deal, particularly posts made on Twitter, now known as X, that were found to have negatively impacted the company’s stock price.
The case was brought by investor Giuseppe Pampena on behalf of shareholders who sold Twitter stock between mid-May and early October 2022. After a three-week trial in a San Francisco federal court, jurors concluded that two tweets Musk posted in May 2022 contained false or misleading information. These statements, they found, contributed directly to a drop in Twitter’s share price during a critical period of the acquisition process.
According to the jury, Musk violated securities regulations that prohibit the dissemination of false or misleading statements capable of influencing stock prices. Legal representatives for the plaintiffs estimated damages at approximately $2.6 billion, though the final amount could vary depending on further court proceedings.
Musk’s legal team responded swiftly following the verdict, describing it as a temporary setback and confirming their intention to appeal. Despite the ruling, Musk has not publicly commented on the decision.
The lawsuit alleged that Musk deliberately drove down Twitter’s stock price to gain leverage in renegotiating the acquisition terms or potentially withdrawing from the deal altogether. One of the central issues involved Musk’s claims that the purchase was “on hold” pending verification of the number of fake or automated accounts, commonly referred to as bots—on the platform. Plaintiffs argued that these statements were strategically designed to pressure Twitter’s board into accepting a lower price.
At the time, Musk was also dealing with declining shares in Tesla, his electric vehicle company, which played a key role in financing the acquisition. A lower purchase price for Twitter would have reduced the amount of Tesla stock Musk needed to sell.
Ultimately, Musk abandoned attempts to exit the deal after Twitter initiated legal action to enforce the agreement. He completed the acquisition in October 2022 and later rebranded the platform as X, integrating it into a broader business ecosystem that includes his artificial intelligence venture xAI and aerospace company SpaceX.
The ruling represents an uncommon legal loss for Musk, who has often managed to avoid significant consequences in high-profile cases. Earlier the same day, he was cleared in a separate defamation lawsuit in Texas. Additionally, in 2023, a San Francisco jury dismissed similar claims brought by Tesla shareholders over his 2018 tweets about taking the company private.
Despite his track record, this latest decision could have significant financial and reputational implications, particularly as it moves into the appeals process.
