Jury Finds Elon Musk Liable for Misleading Twitter Investors in 2022 Takeover

A federal jury in San Francisco has found Elon Musk liable for misleading Twitter shareholders during his 2022 bid to acquire the company, concluding that certain public comments he made about the platform’s user base contributed to a decline in its stock price during the takeover process.

The decision follows a nearly three-week civil trial over claims by investors who say they sold shares at a loss as uncertainty around the deal weighed on the company’s value. The case turned on Musk’s statements in May 2022, including a tweet that said the acquisition was “temporarily on hold” while he sought more information about the number of fake or spam accounts on the platform.

Jurors found that two of those statements misled investors. They did not find that Musk carried out a broader effort to defraud shareholders and rejected a separate claim tied to remarks he made during a podcast, concluding those comments reflected opinion rather than fact.

At the center of the dispute were Musk’s repeated challenges to Twitter’s disclosure that bots made up less than 5 percent of its users. Investors say those comments cast doubt on the company’s reported metrics and pushed the stock lower at a critical stage in the takeover. The claims cover trading between May and October 2022, when shares fell well below Musk’s agreed purchase price.

The uncertainty played out over several months as the deal moved forward. After agreeing to acquire Twitter, Musk questioned the company’s user data and suggested the transaction could be delayed or renegotiated. Twitter sued in Delaware to enforce the agreement, and Musk later completed the purchase at the original price in October 2022, renaming the platform X.

Musk testified that his concerns about bots were genuine and based on what he believed was incomplete or unreliable information provided by Twitter’s leadership. He said raising those concerns publicly did not amount to misleading investors.

Under federal securities laws, statements that can influence stock prices must be accurate and not misleading. That standard can apply to public comments, including social media posts, if investors rely on them when making decisions. In this case, jurors found that two of Musk’s statements crossed that line, even though they stopped short of finding a broader scheme to defraud.

Musk has faced similar claims tied to his public statements about publicly traded companies. In a separate case involving Tesla, investors said they were misled by his statement that he had secured funding to take the company private, though a jury found in his favor. He is also facing a civil case brought by the U.S. Securities and Exchange Commission related to the timing of his disclosures when he began purchasing Twitter shares in early 2022.

Potential damages could reach between roughly $2.1 billion and $2.5 billion based on estimates presented during the trial, though a final amount has not yet been determined. Musk’s legal team has said it plans to appeal.