Elon Musk arrives at federal court on March 4, 2026 in San Francisco, California.
Josh Adelson | getty images
A jury in California found that Elon Musk defrauded Twitter shareholders during his $44 billion acquisition of the social media company, according to a verdict issued Friday.
Plaintiffs’ lawyers said total damages could reach $2.6 billion.
class action lawsuit, pampena vs musk, The filing was originally filed in October 2022, when Musk completed the purchase of Twitter for $54.20 per share. They later renamed the company X before merging it with their artificial intelligence company xAI and then with their reusable rocket maker SpaceX.
“This is a great example of what you can’t do with the average investor — people who have 401ks, kids, pension funds, teachers, firemen, nurses,” Joseph Cotchett, a lawyer for the Twitter investors, told CNBC at a San Francisco courthouse. “That’s what this case was about. It wasn’t about Musk. It was about the entire operation.”
In an emailed statement, Musk’s attorneys with Quinn Emanuel said, “We find today’s verdict, where the jury found both for and against the plaintiffs and found no fraudulent scheme, to be a hurdle in the way. And we look forward to confirmation on appeal.”
Following Musk’s bid to buy Twitter in April 2022, his sentiment towards the deal increasingly soured as he expressed skepticism over the company’s claimed level of bots, spam and fake accounts on its platform. Musk wrote in a tweet the following month that his acquisition was “temporarily put on hold” until Twitter’s CEO could prove that his level of inauthentic accounts was around the 5% reported in the company’s SEC filings.
Musk’s tweet and additional comments caused Twitter shares to fall nearly 10% in a single session. The jury deliberated for four days and unanimously found that Musk’s tweets on May 13 and May 17 were indeed false or misleading.
Former Twitter shareholders, including retail investors and options traders, argued that Musk’s comments were a scheme to pressure the company’s board into selling at a price lower than their original offer. He claimed he was motivated by the decline in stock price TeslaThat would require it to sell even more shares in the automaker than it expects to finance the buyout.
Plaintiffs in the lawsuit said they sold shares below $54.20 in response to Musk’s posts and comments during press interviews. The potential loss figure is based on expert estimates of how much Musk’s flip-flopping affected the share price during the class period.
Lawyers for Twitter investors said it would take about 90 days for claims administration to be set up, and then a few months for the government to process the claims and begin reimbursing investors for some of their losses.
Musk’s lawyers argued that their client’s comments were based on well-founded concerns about bots, spam and fake accounts on Twitter, and did not amount to securities fraud or a scheme to depress the company’s stock price.
The jury said that although Musk had made false and misleading statements that caused harm to some Twitter shareholders, he did not engage in any specific scheme to defraud investors.
While the decision is a harsh rebuke to Musk, the financial implications are minimal considering his net worth, which currently stands at around $650 billion. bloomberg.
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