A California jury has reached a verdict in a class-action lawsuit against Elon Musk, holding him liable for misleading Twitter shareholders during his $44 billion acquisition of the social media platform in 2022. The jury found that a tweet from Musk stating the deal was “temporarily on hold” was misleading, leading to a significant decline in Twitter’s stock price—a slide of nearly 10% in a single day. The implications of this ruling could result in Musk facing damages potentially amounting to $2.6 billion.
Musk defended his tweet by citing concerns over the number of bots, spam accounts, and fake profiles on the platform. However, former shareholders argued that his actions were an attempt to manipulate the situation in order to pressure the company into lowering its share price. After four days of deliberation, the jury concluded that while Musk’s statement was harmful, they did not find evidence of a fraudulent scheme aimed at investors.
Joseph Cotchett, the attorney representing the former shareholders, emphasized the broader implications of the case. Speaking to reporters outside the San Francisco courthouse, he remarked, “This is a great example of what you cannot do to the average investor — people that have 401ks, kids, pension funds, teachers, firemen, nurses. That’s what this case was all about. This was not about Musk. It was about the whole operation.”
In response to the verdict, Musk’s legal representation from Quinn Emanuel expressed their perspective, stating that the outcome represented a minor setback. They highlighted that the jury found both in favor and against the plaintiffs, ultimately concluding there was no fraud scheme involved. The legal team signaled their intention to seek a reversal of the decision on appeal.
Musk initially agreed to buy Twitter at a price of $54.20 per share in October 2022, a transaction that eventually led him to sell $4 billion worth of Tesla stock in the following weeks. The eventual rebranding of Twitter to X followed the completion of the acquisition.
