A federal jury in San Francisco found that Elon Musk misled investors by intentionally driving down Twitter’s stock in the months before his $44 billion acquisition of the company in 2022, though it cleared him of other fraud claims, including that he engaged in a broader scheme to deceive shareholders.
The civil trial grew out of a class-action lawsuit filed before Musk completed the takeover of the platform later renamed X. Jurors considered whether two tweets and a statement Musk made on a May 2022 podcast amounted to intentional fraud that caused shareholders who sold during the period to incur losses.
After roughly three weeks of trial and nearly four days of deliberation, the nine-person jury concluded that two tweets — including one saying the deal was “temporarily on hold” while he investigated the number of fake accounts — misled investors. The jury found Musk’s podcast remark to be an opinion and therefore not meeting the legal threshold for fraud, and it declined to find he had engaged in a scheme to defraud.
The verdict set damages at about $3 to $8 per share per day; plaintiffs’ attorneys said that equates to roughly $2.1 billion in total. Musk’s net worth is estimated at about $814 billion, much of it tied to Tesla stock. Plaintiffs’ lawyer Joseph Cotchett called the decision “an important victory” for investors and the public markets. Musk’s lawyers declined to comment as they left the courtroom.
A central issue at trial was Musk’s repeated claim that Twitter significantly undercounted bots and spam accounts. Twitter’s public filings had estimated around 5% of accounts were fake; Musk testified the filings understated the true figure and that this misleading information justified his efforts to step back from the purchase. In more than a day on the witness stand he described the data Twitter’s board provided as “BS.”
After Musk sought to abandon the deal, Twitter filed suit in Delaware to enforce the merger agreement. On the eve of that enforcement trial, Musk reversed course and agreed to close the transaction at the agreed price.
Plaintiffs argued Musk’s public statements were strategic: as Tesla shares fell and acquiring Twitter grew more costly, his tweets and comments eroded confidence and depressed Twitter’s stock so he could renegotiate or escape the deal. They told jurors the tweets were deliberate actions intended to lower the share price rather than offhand mistakes.
The trial featured testimony from former Twitter CEO Parag Agrawal and former CFO Ned Segal, among others. In closing, plaintiffs’ counsel Mark Molumphy urged jurors to hold Musk accountable and compensate the thousands of investors who sold amid the uncertainty, pointing to the May 13, 2022 tweet that the deal was “on hold.” Musk’s defense emphasized he could not control individual shareholders’ decisions to sell and noted that those who held shares generally fared well when the deal closed.
Musk’s lawyers sought mistrials multiple times, arguing he could not receive a fair trial in San Francisco given local hostility. The case echoes earlier litigation over Musk’s social media use; in 2019 he testified in a separate San Francisco trial about tweets concerning taking Tesla private in 2018, and a jury there found he had not committed wrongdoing.
