A U.S. federal jury has found Elon Musk liable in a civil lawsuit brought by Twitter shareholders over his 2022 acquisition of the social media company. The case centered on claims that public statements made during the deal process affected the company’s stock price.
The verdict was delivered in a San Francisco federal court following a trial that examined whether Musk’s statements about the platform’s bot population misled investors and influenced market behavior, according to Reuters.
The lawsuit focused on statements made shortly after Musk agreed to acquire Twitter for $44 billion in April 2022. Shareholders argued that Musk’s public comments raised doubts about the platform’s user metrics, contributing to a decline in share value during the transaction period.
Jurors determined that two specific statements were materially misleading. One involved Musk’s claim that the acquisition was “temporarily on hold” pending verification of spam and bot accounts. Another suggested that the proportion of such accounts could be significantly higher than previously reported.
However, the jury did not find sufficient evidence to support a broader claim that Musk engaged in a coordinated scheme to defraud investors. The ruling instead focused on the impact of individual statements on market perception.
The case applies to shareholders who sold Twitter stock between May and October 2022, a period during which the acquisition terms and timeline were uncertain. Plaintiffs argued that these conditions created volatility that affected trading decisions.
Damages have not yet been finalized, though legal representatives for the shareholders estimated potential compensation could reach approximately $2.5 billion. The final amount will be determined in subsequent proceedings.
Musk’s legal team indicated plans to appeal the decision, describing the outcome as temporary and subject to further review. The case adds to a series of legal challenges involving Musk and public statements related to corporate transactions.
From a regulatory standpoint, the case highlights the sensitivity of financial markets to executive communications, particularly when conveyed through social media platforms. Statements that introduce uncertainty into large scale transactions can influence investor behavior and market pricing.
The underlying issue relates to disclosure timing and the accuracy of publicly shared information during merger and acquisition processes. In such transactions, even informal statements can carry significant weight due to their potential to affect valuation and investor confidence.
Musk ultimately completed the acquisition in October 2022 and later rebranded the platform as X. The deal remains one of the largest leveraged buyouts in the technology sector.
The verdict underscores the legal and financial implications of public communications during high value corporate transactions, particularly when those communications intersect with active market trading.