A San Francisco jury has found Elon Musk liable for misleading investors by deliberately driving down Twitter's stock price during the turbulent months leading up to his $44 billion acquisition of the social media company in 2022. The verdict represents a significant, if partial, defeat for a billionaire entrepreneur who has spent the past decade testing the boundaries of what high-profile public figures can say without legal consequence.
After deliberating for four days, jurors unanimously found that Musk's tweets posted on May 13 and May 17 were materially false or misleading. The tweets and additional comments sent shares of Twitter sliding by almost 10 per cent in a single session. Musk wrote that his acquisition was "temporarily on hold" until Twitter's chief executive could prove its fake account levels were around the 5 per cent reported in the company's SEC filings.
The mechanics of the case expose a genuine tension in modern markets. Shareholders who sued argued that Musk's remarks amounted to a scheme to pressure the company's board into selling for a lower price, motivated by stock price declines at Tesla that would have required him to sell even more shares than intended to finance the buyout. The timing was undeniably problematic. Twitter's shares fell below $33, or about 40 per cent below Musk's original purchase price, while the deal hung in limbo.
During testimony, Musk acknowledged that if the trial "was a trial about whether I made stupid tweets, I would say I'm guilty," though he added he did not believe the posts would cause anything "material." The comment offered a window into how Musk views his public communications: a stream-of-consciousness exercise rather than strategically calibrated market-moving statements.
Yet here lies the crux of securities law. Attorney Joseph Cotchett, representing the investors, told CNBC that this case exemplified "what you cannot do to the average investor — people that have 401ks, kids, pension funds, teachers, firemen, nurses." The jury clearly agreed that reach and influence carry obligations. Even casual tweets, when sent by a figure with Musk's following and position in companies he operates, carry market weight.
The verdict carries important limits. Jurors found that while Musk did mislead investors with two tweets, he did not do so with a statement made on a podcast because it was an opinion, and they absolved him of scheming to drive down the stock. The distinction matters considerably. The jury rejected the broader claim that Musk orchestrated a calculated fraud; instead, they found he made false statements that harmed some investors, but without proof of an overarching deceptive scheme.
Jurors awarded shareholders between roughly $3 and $8 per share per day in damages, which plaintiffs' lawyers said amounts to approximately $2.1 billion. For context, Musk's fortune is estimated at roughly $814 billion, much of it tied up in Tesla shares. The financial impact, while substantial, barely registers against his net worth.
The verdict marks a rare defeat for the world's richest person, dubbed "Teflon Elon" for his track record of winning high-stakes legal battles. He prevailed in a 2023 trial over Tesla investors' allegations that he misled them in a tweet five years earlier saying he had "funding secured" to take the electric car-maker private.
Three years ago in the same San Francisco federal court, Musk spent about eight hours testifying about his plans to buy Tesla for $420 per share in a proposed 2018 deal that never materialised, and a nine-member jury absolved him of wrongdoing in that case. This time, the outcome shifted.
Musk's attorneys with Quinn Emanuel said in a statement that they view "today's verdict, where the jury found both for and against the plaintiffs and found no fraud scheme, as a bump in the road, and look forward to vindication on appeal." An appeal will likely focus on whether Musk's statements were actually false in the way securities law requires, or merely optimistic negotiating positions.
The broader implication cuts across all high-net-worth individuals who move markets with their words. The verdict establishes that even billionaires who build companies cannot treat public statements as consequence-free when those statements materially affect share prices. Yet the jury's rejection of a conspiracy finding suggests courts remain cautious about imposing liability based on motive alone. The line between hard-nosed negotiating and illegal manipulation remains contested terrain, and this verdict marks one jury's attempt to draw it.