Jury finds Elon Musk misled Twitter investors during acquisition dispute

A civil jury in California has determined that Elon Musk misled Twitter investors during his attempt to withdraw from the $44 billion acquisition of the social media platform in 2022. The verdict, delivered on Friday, concluded that Musk’s public statements at the time were intentionally deceptive and contributed to investor losses.

During the dispute, Musk posted on the platform—now rebranded as X—that concerns over the number of fake or spam accounts had put the deal “temporarily on hold.” He specifically wrote that the acquisition was pending confirmation that such accounts made up less than 5% of users. These remarks came as he was actively seeking to back out of the agreement, which ultimately led Twitter to file a lawsuit compelling him to complete the purchase.

Following Musk’s tweet, Twitter’s share price dropped by approximately 8% in the days that followed. This decline prompted investor Giuseppe Pampena to initiate legal action against Musk on behalf of other shareholders who sold their Twitter stock between May 13, the date of the tweet, and October 4, when the deal was officially finalised.

The lawsuit argued that Musk deliberately raised doubts about Twitter’s user base to create instability around the company, which in turn pushed the stock price down. According to the plaintiffs, this allowed Musk to gain leverage in renegotiating the acquisition while causing financial harm to investors who sold shares during that period. Musk’s legal team, however, maintained that his statements reflected genuine concerns about the platform’s bot problem and were not intended to manipulate the market.

Despite this defence, the jury sided with the plaintiffs, finding their argument more convincing. While the exact financial penalty Musk may face has not yet been finalised, Pampena’s legal representatives indicated that damages could reach as high as $2.6 billion, as reported by CNBC. Even so, such a figure represents only a small portion of Musk’s overall wealth, which Bloomberg estimates to exceed $660 billion.

This case is not the first time Musk’s tweets have led to legal scrutiny. In 2018, he posted that he had secured funding to take Tesla private at $420 per share, a claim that drew attention from the U.S. Securities and Exchange Commission (SEC). Regulators alleged that the statement was misleading and constituted securities fraud. During that case, Musk testified that his tweet was not intended as a joke referencing cannabis culture and insisted that he genuinely believed the funding would materialise at the stated price.

Although Musk ultimately prevailed in a shareholder lawsuit related to the “funding secured” tweet, the outcome of the Twitter-related case was different, with the court ruling against him.

After completing the acquisition, Musk rebranded Twitter as X and later merged the platform with his artificial intelligence venture, xAI. He stated that the combined entity was valued at $113 billion. More recently, SpaceX was also merged with xAI, a move Musk said was driven by ambitions to develop space-based data centres and expand technological capabilities beyond Earth.