Twitter shareholders to get $2.6 billion? US jury finds Elon Musk liable for misleading investors in 2022
&imwidth=600&imheight=450&format=webp&quality=medium "Twitter shareholders to get $2.6 billion? US jury finds Elon Musk liable for misleading investors in 2022")
File photo of Elon Musk. Photograph: (X)
Following a three-week trial in a San Francisco federal court, during which Elon Musk testified in person, the jury concluded that two tweets he posted in May 2022 contained false remarks that contributed to a drop in Twitter’s share price.
A federal jury in California, US, discovered on Friday that Elon Musk misled Twitter shareholders by driving down the company's share price, which he was supposed to buy in a $44 billion deal. The verdict indicated that the world's richest person could be ordered to pay billions of dollars based on the damages calculated by the jurors.
After a while following the judgment, the entrepreneur's lawyers told the news agency AFP that their client will appeal the decision, labelling it as a "setback". Following a three-week trial in a San Francisco federal court, during which Elon Musk testified in person, the jury concluded that two tweets he posted in May 2022 contained false remarks that contributed to a drop in Twitter’s share price.
The investor Giuseppe Pampena filed a lawsuit on behalf of shareholders who sold their Twitter stock between mid-May and early October 2022. Musk later completed the acquisition of the platform in late October 2022 and subsequently rebranded it as X.
According to the verdict form, jurors determined that Musk violated securities regulations prohibiting false or misleading statements that negatively impact stock prices. In this instance, the affected stock was Twitter’s. Lawyers representing the plaintiffs estimated damages at around $2.6 billion. Musk, who remains highly active on X, did not immediately respond to the ruling.
Elon Musk charged with stock price manipulation of Twitter (X)
Previously, a jury in the same San Francisco federal court freed him within hours of similar charges brought by Tesla shareholders in 2023, after his 2018 tweets claiming that he had the funding to take the automaker private. Additionally, a civil complaint filed in California accused Elon Musk of downgrading the stock price of Twitter in order to gain the privilege to renegotiate the purchase price or get out of the deal completely. The act caused several individuals who sold shares to lose money.
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A civil lawsuit filed in California alleged that Elon Musk deliberately pushed down Twitter’s stock price to gain leverage in renegotiating the acquisition deal or potentially walk away from it altogether, resulting in financial losses for investors who sold their shares. During the process, Musk tweeted that the deal was temporarily on hold until Twitter’s management could verify that the proportion of “bots”, automated accounts rather than real users, was as low as the company had claimed.
The plaintiffs argued that these remarks were part of a broader strategy to pressure the board into agreeing to a lower purchase price than initially offered. This came at a time when Tesla shares were declining, which would have required Musk to sell more of his holdings to fund the acquisition. Eventually, Musk dropped his attempt to exit the deal in late 2022 after Twitter pursued legal action to enforce the agreement. He has since integrated the platform with his artificial intelligence venture xAI and his space exploration company SpaceX.
