A California jury has found that Elon Musk made misleading statements to Twitter investors in the lead-up to his $44 billion acquisition of the social media company in 2022, according to a verdict issued on Friday.
The ruling comes in a class-action lawsuit filed by former Twitter shareholders, who alleged that Musk’s public comments influenced the company’s stock price during the acquisition process. Attorneys for the plaintiffs said total damages could reach up to $2.6 billion.
The case, filed in October 2022, centred on Musk’s statements regarding the number of fake and spam accounts on Twitter. In May 2022, Musk said the deal was “temporarily on hold” pending verification of such accounts, comments that contributed to a sharp drop in the company’s share price.
The jury found that Musk’s statements on May 13 and May 17 were materially false or misleading and caused losses to some investors. However, it did not find evidence of a broader scheme to defraud shareholders.
Plaintiffs argued that Musk’s remarks were intended to pressure Twitter’s board into renegotiating the acquisition at a lower price. They also claimed the statements led investors to sell shares below the agreed purchase price of $54.20 per share.
Musk’s legal team said the verdict was mixed and signalled plans to appeal. In a statement, his attorneys said they viewed the decision as “a bump in the road” and expected eventual vindication.
The lawsuit, known as Pampena v. Musk, involved retail investors and traders who claimed financial losses linked to the volatility triggered by Musk’s public statements.
While the verdict represents a legal setback for Musk, analysts note that the potential financial impact remains limited relative to his overall wealth.
Claims processing for affected investors is expected to begin in the coming months, with payouts likely to follow thereafter.
