U.S. Jury Finds Elon Musk Misled Twitter Shareholders

Elon Musk was found by a federal jury in California to have misled Twitter shareholders, a verdict that jurors say caused the social media company’s stock to tumble while he was attempting a $44 billion takeover.

The decision in the class-action securities suit could expose the billionaire to a multi-billion-dollar judgment: jurors’ damage calculations were reported to be roughly $2.6 billion.

Shortly after the verdict, lawyers for Mr. Musk told AFP their client plans to appeal, calling the outcome a “setback.”

Following a three-week trial in U.S. District Court in San Francisco that included Mr. Musk’s in-person testimony, the jury concluded two tweets he posted in May 2022 contained false statements that drove down Twitter’s share price.

Mr. Musk completed the purchase of the platform in late October 2022 and later rebranded it as X.

The jury found he breached a securities rule prohibiting false or misleading statements that depress a company’s stock — in this instance, Twitter’s — according to the verdict form.

Plaintiffs’ counsel put the estimated damages at about $2.6 billion.

The ruling represents an uncommon courtroom loss for Mr. Musk, who has often avoided liability in high-profile cases and earned the nickname “Teflon Elon.”

Less than three years ago, in 2023, a separate jury in the same San Francisco court cleared him within hours on related claims brought by Tesla shareholders over his 2018 tweets about having funding to take Tesla private.

The civil complaint in California said Mr. Musk’s statements depressed Twitter’s stock to gain leverage — either to renegotiate the deal’s price or to walk away — harming shareholders who sold their shares as a result.

At one point during the takeover saga, Mr. Musk tweeted that he was pausing the acquisition until Twitter produced proof that the proportion of “bots” — automated fake accounts — was as low as the company claimed.

Plaintiffs argued those tweets were tactics to pressure Twitter’s board into accepting a lower purchase price at a time when Tesla’s shares were falling, which would have forced Mr. Musk to sell more Tesla stock to fund the acquisition.

Mr. Musk ultimately abandoned his attempt to withdraw from the purchase in late 2022 after Twitter sued to enforce the agreement.

Since taking control, he has folded the social network into his artificial intelligence company xAI and his private space venture SpaceX.

Forbes earlier this month estimated Mr. Musk’s net worth at $839 billion, a valuation based largely on his holdings in companies including Tesla and SpaceX.