Elon Musk misled Twitter investors by trying to exit acquisition, jury says

A civil jury in California on Friday ruled that Elon Musk intentionally misled Twitter investors when tried to back away of its acquisition of the platform for $44 billion in 2022.

At the time, Musk had tweeted that Twitter had too many bots, so he later tried to renege on the acquisition. (Twitter ended suing musk to force him to close the deal.)

“The Twitter deal is temporarily on hold pending details supporting the estimate that fake/spam accounts actually represent less than 5% of users,” Musk wrote on the platform he has since rebranded as X.

In the days after Musk posted this, Twitter shares decreased 8%. Investor Giuseppe Pampena filed a lawsuit against Musk on behalf of other former Twitter investors who had sold Twitter shares between May 13 (the day of the tweet) and October 4, the day the deal closed.

The one from Pampena lawsuit argued that Musk intentionally posted his concerns with Twitter to create uncertainty about the platform’s stability to artificially drive down its stock price, causing losses to those who sold shares during that window. Musk’s lawyers argued that he was raising legitimate concerns about the number of bots in the app. But the jury was more convinced by the plaintiff’s argument.

It’s still unclear how much money Musk will have to pay those former Twitter shareholders, but Pampena’s lawyer said damages could reach up to $2.6 billion, according to CNBC. It’s not a big blow for Musk, since Bloomberg estimates his net worth at more than $660 billion.

This is not Musk’s first experience going to court over tweets. In 2018, he tweeted that he had secured financing take Tesla private at $420 per share, meaning he planned to buy out public shareholders and take the company off the stock exchanges. He The SEC alleges that these posts were misleading, accusing Musk of securities fraud. Musk later had to testify in court that he was not making a marijuana joke (420 being a widely recognized slang reference to cannabis) and maintained that he sincerely believed he would take Tesla public at $420 per share, which was a substantial premium over Tesla’s stock price at the time.

Musk emerged victorious in a similar lawsuit brought by shareholders over the “funding secured” tweet, but this time he will have to pay.

After acquiring Twitter, Musk renamed the company X and then merged it with his new artificial intelligence company. xAI. The combined company was valued at $113 billionaccording to musk. Then last month, SpaceX merged with xAI. Musk has said the merger was motivated by his desire to build data centers in space.