In brief
A San Francisco jury unanimously ruled that Elon Musk misled investors regarding his acquisition of Twitter, leading to a substantial drop in the company's stock price. The verdict could trigger large financial payouts for investors who relied on Musk's statements. Musk argued that he did not mislead anyone and claimed that his comments were misinterpreted. The ruling sends a clear message about accountability for misleading market statements.
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 deliberation, a jury in San Francisco federal court unanimously decided 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 found that certain of his public claims regarding problems in Twitter's user metrics and his indications of possibly backing out of the $44 billion acquisition deal were intentionally misleading.
Lawyers for Musk did not respond to a request for comment. This is not the first time Musk has found himself in legal trouble for his tweets. However, he succeeded in a 2023 lawsuit brought by Tesla shareholders claiming he had misled them with posts about the car company.
In the verdict, the jury found Musk had artificially lowered Twitter's stock price by a range of approximately $8 to $3 per share between May and October 2022 due to his public statements. This could mean substantial damages for each investor affected.
Monte Mann, a trial attorney focused on business litigation, stated, If you move the market with your words, you own the consequences. Musk began tweeting in May 2022 about Twitter's alleged issues with fake accounts and mentioned halting the deal before attempting to back out entirely.
After a lawsuit from Twitter, Musk eventually took over the platform at the originally agreed-upon price in October 2022, later rebranding it as X.
Investor Brian Belgrave testified that he sold thousands of Twitter shares based on Musk's public indications, which turned out to be a poor decision as shares were eventually purchased by Musk at a significantly higher price.
During the trial, Musk was combative and often refused to give straightforward answers, telling the jury that he felt misled by lawyers' questions. He acknowledged that he may have made unfortunate tweets but maintained that his statements did not mislead investors.
