A California jury has found Elon Musk responsible for losses suffered by Twitter investors when the company's stock price fell during his 2022 takeover bid. The verdict, delivered in federal court in San Francisco, concluded that Musk's public comments disparaging the social media platform were intended to lower its stock price to secure a better deal.
The lawsuit, brought by a group of investors, centred on Musk's tweets between April and October 2022, in which he repeatedly claimed Twitter was rife with spam bots and fake accounts. Investors argued that these statements caused the stock to drop, allowing Musk to potentially renegotiate his $44bn (£35bn) purchase offer. Musk eventually completed the acquisition at his original price of $54.20 per share, later renaming the company X.
During the trial, Musk testified that he did not intend to manipulate the stock price and believed his comments were legitimate concerns. However, the jury disagreed, finding him liable on two of four fraud claims. The panel calculated the daily impact of Musk's statements on Twitter's share price, though the exact damages—potentially billions of dollars—will be determined later.
Mark Molumphy, lawyer for the investors, hailed the decision as "the largest securities jury verdict in United States history," adding that it sends a strong message that no one is above the law. Musk's legal team described the ruling as "a bump in the road" and vowed to appeal, citing recent successes in other lawsuits.
Legal experts noted the nuanced outcome, with Monte Mann of Armstrong Teasdale observing that not all market-moving statements create liability, but context, timing, and intent can tip the balance. The jury rejected claims that Musk engaged in a broader scheme to defraud investors, highlighting the fact-specific nature of the case.
