A jury in California has ruled that Elon Musk misled investors during the lead-up to his $44 billion acquisition of Twitter in 2022. The verdict comes after a thorough examination of tweets he posted that the jury deemed misleading and potentially damaging to investor interests.
During the trial, Musk testified that he did not believe his social media posts would have a significant impact on the market. However, he admitted, “If this was a trial about whether I made stupid tweets, I would say I’m guilty.” This acknowledgment highlights the complexity of social media communication and its potential consequences in high-stakes financial dealings.
Although the jury found that Musk did not intentionally set out to defraud shareholders, they pointed to two specific tweets from May 13 and May 27, 2022, as materially false or misleading. These tweets reportedly influenced some investors to sell Twitter shares below the proposed acquisition price of $54.20 per share, impacting the financial landscape surrounding the deal.
The stakes of the ruling are significant, with damages potentially totaling as much as $2.6 billion, as indicated by attorneys representing the plaintiffs. In light of the verdict, Musk’s legal team is expected to pursue an appeal, signaling ongoing legal challenges ahead.
Central to the case were Musk’s assertions regarding the accuracy of Twitter’s assessments of its user base, particularly involving claims about spam and fake accounts. Musk pointed out discrepancies between Twitter’s reporting and his own estimates, suggesting that the number of fake accounts could be substantially higher than the less than 5% claimed by Twitter, which he argued formed the basis of his offer.
The deal to acquire Twitter remains in limbo, pending further verification of the company’s user statistics, specifically regarding the prevalence of spam and fake accounts. Musk has emphasized that until Twitter’s CEO provides satisfactory proof of its user metrics, the acquisition cannot proceed, adding another layer of complexity to the ongoing saga of one of the largest tech transactions in history.
