A jury in San Francisco has found Elon Musk liable for misleading investors by deliberately driving down Twitter's stock price in the months leading up to his 2022 acquisition of the social media company for $44 billion.
The verdict, returned after nearly four days of deliberation, nearly three weeks after the trial began on March 2, marks a rare courtroom loss for the world's richest person. However, the jury absolved him of some fraud allegations, finding that he did not "scheme" to mislead investors.
At the centre of the dispute were tweets made on May 13, 2022, that said the Twitter deal was "temporarily on hold" while he sought information on the number of fake accounts on the service. Musk's tweets and additional comments sent shares of Twitter sliding by almost 10 per cent in a single session.
For months during the turbulent 2022 acquisition process, Musk had publicly questioned Twitter's reported account authenticity. Musk testified that Twitter had a much higher number of fake and spam accounts than the 5 per cent it disclosed in regulatory filings. His legal team argued those concerns were genuine and based on legitimate due diligence. In his testimony, Musk maintained that Twitter's leadership lied about the amount of bots on the platform and withheld information from him about how the number of fake accounts was calculated.
The plaintiffs told a different story. The investors claimed that Musk's social media posts and public statements were actually part of a deliberate plan to drive down the company's stock price so he could renegotiate at a better price. The lawsuit specifically targeted shareholders who sold their stock during the uncertainty Musk created between May and October 2022. Twitter's shares fell below $33, or about 40 per cent below Musk's original purchase price, while the deal was hanging in limbo.
The jury unanimously found that Musk's tweets on May 13 and May 17 were materially false or misleading. Yet it rejected the more serious claim that Musk had orchestrated a deliberate scheme. The distinction matters legally and carries real consequences for damages exposure.
Financial liability remains unclear. Total damages could reach up to $2.6 billion, attorneys for the plaintiffs said. However, the financial implications are minimal considering his net worth, which currently sits at about $650 billion, according to Bloomberg. The amount of damages he must pay to individual investors will be determined at a later date when shareholders submit claims.
The verdict sends a message about accountability in public markets, though its practical impact remains contested. "This verdict sends a clear message if you move the market with your words, you own the consequences," said Monte Mann, a trial lawyer not involved in the case. Musk's legal team has signalled plans to appeal the decision.