Elon Musk found misleading investors during 2022 Twitter takeover, jury rules

A federal jury in San Francisco has found that Elon Musk was misleading in his public statements during the critical period of his 2022 takeover of Twitter.

After two days of deliberations, the jury delivered a unanimous verdict against the Tesla and SpaceX CEO, siding with a group of Twitter investors who argued they had relied on Musk’s statements when making investment decisions, Caliber.Az reports per foreign media.

During testimony earlier this month, Musk maintained that he did not mislead investors, saying that people “simply read too much into his public comments and tweets.”

The jury concluded that Musk’s claims about alleged problems with Twitter’s user metrics, and suggestions that he might back out of the $44 billion acquisition, were intentionally misleading.

Lawyers for Musk did not respond to requests for comment. Lawyers for the investors, led by Oregon small-business owner Brian Belgrave, also did not immediately respond.

This is not the first legal challenge Musk has faced over his social media activity. He previously defeated a 2023 lawsuit from Tesla shareholders alleging that he had misled them with tweets about the electric car company.

In Friday’s ruling, the San Francisco jury determined that Musk’s statements artificially depressed Twitter’s stock price by roughly $8 per share to $3 per share between May and October 2022. That could result in each investor in the class receiving thousands of dollars in damages.

Monte Mann, a trial attorney specializing in business litigation at Armstrong Teasdale, said the verdict “sends a clear message.”

"If you move the market with your words, you own the consequences," he said.

Musk began tweeting in May 2022 about Twitter’s alleged issues with fake accounts, or “bots,” and indicated that the deal was “on hold” before attempting to back out entirely. Twitter sued Musk to enforce the acquisition, and in early October he completed the takeover at the originally agreed price. The platform was later rebranded as X.

Investors like Belgrave suffered financially during this period. He told the jury he sold thousands of Twitter shares in July 2022 after concluding Musk would not proceed with the acquisition. His sale price was lower than his purchase price earlier that year and far below the $54.20 per share Musk eventually paid.

"I got screwed," Belgrave said. "I got cheated."

During his testimony, Musk clashed repeatedly with lawyers for the investor class, refusing to answer some questions with a simple “yes” or “no,” and arguing that attorneys were attempting to mislead the jury.

"If this was a trial on whether I've made stupid tweets, I'd say I'm guilty," Musk conceded at one point.

By Sabina Mammadli