A California jury has ruled that Elon Musk is responsible for the drop in Twitter’s stock price when he sought to buy the company for $44bn in 2022. The verdict came in a lawsuit brought by investors who claimed the billionaire publicly disparaged the platform to drive down its share price and secure a better deal.
The trial in federal court in San Francisco focused on whether Musk intended to manipulate the market with his posts. During a six-month period after his initial offer, Musk repeatedly told his millions of followers that Twitter was plagued by bots and spam accounts. His lawyers argued the comments were legitimate concerns, but the jury disagreed after three days of deliberation.
The panel calculated how much Musk’s statements reduced Twitter’s stock price on each trading day. While the exact damages are yet to be determined, they could amount to billions. The jury rejected two of the four fraud claims and found Musk did not engage in a scheme to defraud investors, but held him liable on the remaining counts.
Lawyers for the investors called the decision “the largest securities jury verdict in United States history”. Musk’s legal team described it as “a bump in the road” and said they would appeal, pointing to recent appeals victories. The case centres on a period when Musk wavered on the purchase, including a tweet that put the buyout “temporarily on hold”, causing shares to fall up to 20% in a day.
Investors sold their shares below the $54.20 offer price, believing the deal was collapsing. “He wanted a different deal”, said Aaron Arnzen, the investors’ lawyer, arguing Musk orchestrated a public spectacle to renegotiate or escape the acquisition. Musk ultimately completed the purchase at the original price and later renamed the company X.
