A federal jury in San Francisco delivered a verdict against Elon Musk on Friday, determining that his tweets regarding fake accounts on Twitter misled investors during his $44 billion acquisition of the platform in 2022. The jury's decision marks a significant moment for former Twitter investors who argued that Musk's public statements had defrauded them.
While the exact amount Musk may owe in damages remains uncertain, estimates suggest it could reach billions. According to reports, jurors indicated that shareholders might be entitled to "between about $3 and $8 per stock per day," reflecting the impact of Musk's statements on Twitter's stock value.
The class action lawsuit, one of several filed against Musk following his takeover, highlighted his tweets about the prevalence of fake accounts. As Tesla's stock price plummeted shortly after he announced his intention to purchase Twitter at $54.20 per share, the lawsuit claimed Musk's communications were strategically designed to lower Twitter's share price, potentially allowing him to renegotiate or withdraw from the deal.
Particularly scrutinized was Musk's May 13, 2022, tweet stating that the Twitter acquisition was "temporarily on hold" due to concerns over fake accounts and bots. This statement, along with another suggesting that fake accounts could represent over 20 percent of users, led to a notable decline in Twitter's stock value.
During the trial, Musk defended his tweets as mere expressions of his thoughts, asserting that Twitter executives had misrepresented the number of bots on the platform. In contrast, former shareholders contended that they sold their shares at reduced prices due to Musk's indecisiveness and public statements.
Musk has faced multiple lawsuits related to his $44 billion acquisition of Twitter, including other shareholder claims regarding delays in disclosing his stake in the company and a separate case from former executives concerning unpaid severance benefits, which Musk eventually settled. He narrowly avoided a trial concerning his attempts to back out of the acquisition deal.
