Jury Says Elon Musk Misled Investors in Twitter Deal, Rejects Some Fraud Allegations

Jury Finds Elon Musk Misled Investors in Twitter Deal, Clears Him of Some Fraud Claims

A federal jury in San Francisco has found Elon Musk liable for misleading investors in the run-up to his $44 billion acquisition of Twitter in 2022. However, the panel stopped short of holding him responsible for an intentional scheme to defraud shareholders.

The verdict followed nearly four days of deliberations in a civil class-action lawsuit filed by Twitter shareholders. Jurors examined whether Musk’s public statements—including tweets and podcast remarks in May 2022—amounted to market manipulation.

The nine-member jury concluded that two of Musk’s tweets, including one stating the deal was “temporarily on hold,” misled investors and contributed to fluctuations in Twitter’s stock price. However, it ruled that his comments during a podcast did not constitute fraud, describing them as opinion rather than deliberate deception.

Shareholders were awarded damages estimated at $3 to $8 per share per day, with total compensation projected at around $2.1 billion, according to plaintiffs’ lawyers.

Focus of the Trial

The case centered on Musk’s claims about the prevalence of fake accounts on Twitter. He argued that bots were far more widespread than the company’s stated figure of under 5%, citing this as a key reason for attempting to back out of the deal.

After Musk moved to terminate the agreement, Twitter sued him in Delaware to enforce the acquisition. Just before the trial in that case began, Musk reversed course and completed the purchase at the original price.

Jurors were tasked with determining whether Musk’s statements were intended to depress Twitter’s share price. While they found certain tweets misleading, they did not find evidence of a broader scheme to manipulate the market.

Musk’s Defence

During testimony, Musk maintained that Twitter’s leadership misrepresented the number of fake accounts and failed to provide transparency on how those figures were calculated.

He also argued that shareholders ultimately benefited from the deal, as he completed the acquisition at the agreed price despite market uncertainty. During that period, however, Twitter’s stock fell sharply—dropping below $33, about 40% lower than Musk’s offer price—impacting investors who sold their shares.

“I can’t control whether people sell their stock, but everyone who held the stock fared extremely well,” Musk said.

Plaintiffs countered that Musk’s tweets were strategically timed to push down Twitter’s stock price, either to renegotiate the deal or exit it altogether as the financial burden of the acquisition increased alongside a decline in Tesla stock.