A jury found Elon Musk liable for misleading investors by intentionally driving down Twitter’s stock in the months before his 2022 acquisition of the company for $44 billion, though it cleared him of some fraud claims, including that he “schemed” to deceive shareholders.
The civil trial in federal court in San Francisco arose from a class-action lawsuit filed before Musk completed the takeover of Twitter, later renamed X. Jurors considered whether two tweets and remarks Musk made on a May 2022 podcast amounted to intentional fraud that caused shareholders who sold during the period to lose money.
After nearly four days of deliberation following a roughly three-week trial, the nine-person jury concluded Musk misled investors with two tweets — including one saying the deal was “temporarily on hold” while he investigated the number of fake accounts — but that his podcast statement was an opinion and did not meet the threshold for fraud. The jury also declined to find that he engaged in a scheme to defraud.
The verdict set damages at roughly $3 to $8 per share per day, which plaintiffs’ attorneys said totals about $2.1 billion. Musk’s net worth is estimated at about $814 billion, much of it in Tesla stock. Plaintiffs’ lawyer Joseph Cotchett called the decision “an important victory” for investors and the public markets, saying it shows wealth and power do not place someone above the law. Musk’s lawyers declined to comment as they left the courtroom.
A central focus of the trial was Musk’s repeated claims that Twitter significantly underreported the number of bots and spam accounts on its service. Musk testified that Twitter’s public filings, which estimated about 5% of accounts were fake, understated the true figure and that this misleading information justified his attempt to retreat from the purchase. He testified more than a day in court, describing the data Twitter’s board provided as “BS.”
After Musk sought to back out, Twitter sued in Delaware to enforce the original agreement. On the eve of that enforcement trial, Musk reversed course and agreed to close the deal at the agreed price.
The plaintiffs argued Musk’s tweets were strategic: as Tesla shares fell and buying Twitter became more costly, his public statements diluted confidence and depressed Twitter’s stock so he could renegotiate or escape the deal. They told jurors the tweets were not offhand mistakes but deliberate actions intended to lower the share price.
The trial included testimony from former Twitter CEO Parag Agrawal and CFO Ned Segal, among others. Plaintiffs’ counsel Mark Molumphy urged jurors in closing to hold Musk accountable and award compensation to the thousands of investors who sold during the uncertainty, pointing to the May 13, 2022 tweet that the deal was “on hold.”
Musk maintained he could not control individual shareholders’ decisions to sell and said those who held their stock generally did well when the deal closed. His lawyers sought mistrials multiple times, arguing Musk could not receive a fair trial in San Francisco given local hostility.
This case echoes previous litigation over Musk’s use of social media. In 2019 he testified for about eight hours in a separate San Francisco trial over tweets about taking Tesla private in 2018; a jury there found he had not committed wrongdoing.
