In brief
In a unanimous verdict, a San Francisco jury concluded that Elon Musk had misled Twitter investors about key metrics during his acquisition in 2022. Musk's claims about user problems and a potential withdrawal from the $44 billion deal were deemed intentionally misleading, which has opened the door for investor compensation. Musk's public comments reportedly lowered Twitter's stock price by significant margins, potentially entitling investors to substantial damages.
Elon Musk was misleading in his public statements during a crucial period of his 2022 Twitter takeover, a jury has found.
After two days of deliberations, a jury in San Francisco federal court decided in a unanimous verdict against the tech titan, who was sued by a group of Twitter investors arguing they had relied on his statements.
While testifying in court earlier this month, Musk argued that he did not mislead investors and that people simply read too much into his public comments and tweets.
The jury instead found that certain of his public claims of problems in Twitter's user metrics, and that he was possibly backing out of the $44bn acquisition deal, were intentionally misleading.
Lawyers for Musk did not respond to a request for comment. Nor did lawyers for the investors, led by Brian Belgrave, a small-business owner from Oregon.
This is not the first time Musk has found himself in legal trouble for his tweets. But he was able to beat a 2023 lawsuit brought by Tesla shareholders claiming the CEO had misled them with posts about the car company.
In Friday's verdict, the San Francisco jury found that Musk had artificially lowered the price of Twitter's stock by a range of roughly $8 per share to $3 per share between May and October 2022 because of his public statements.
Monte Mann, a trial attorney focused on business litigation at Armstrong Teasdale, said the verdict against Musk sends a clear message. If you move the market with your words, you own the consequences.
Musk began around May 2022 to tweet about Twitter's purported issues with fake accounts, or bots, and said the deal was on hold before announcing he wanted out of the deal entirely. Twitter took Musk to court to force the multi-billionaire to abide by the deal, and in early October Musk did so, taking over Twitter at the originally agreed price, which he would later rename as X.
Those months proved to be financially damaging for Twitter investors like Belgrave, who bought and sold shares during that time. Belgrave told the jury he sold thousands of Twitter shares in July 2022, believing that Musk was no longer going to buy the platform because of his public posts and comments, thus incurring losses.
