A federal jury in San Francisco found Elon Musk liable for misleading investors by making public statements that depressed Twitter’s stock in the months before he closed his $44 billion acquisition of the company, which he later renamed X. Jurors, however, cleared him of other fraud claims and concluded he did not carry out a deliberate scheme to defraud shareholders.
The civil case grew out of a class-action lawsuit filed shortly before the purchase closed. Over a three-week trial that began March 2, jurors examined whether two tweets and remarks Musk made on a May 2022 podcast amounted to intentional fraud that caused shareholders to sell at reduced prices.
After nearly four days of deliberation, the nine-member jury found Musk liable based on two tweets, including a May 13, 2022 post saying the deal was “temporarily on hold” while he investigated the number of fake accounts. The panel determined the podcast comment was an expression of opinion and not a basis for liability, and it did not find sufficient evidence that Musk engaged in an overarching scheme to drive down Twitter’s share price.
The jurors awarded damages that plaintiffs’ counsel say amount to roughly $3 to $8 per share per day for the period in question — a figure plaintiffs estimate totals about $2.1 billion. Musk’s personal wealth is estimated at about $814 billion, much of it concentrated in Tesla stock.
Plaintiffs’ attorneys argued the tweets were strategic, aimed at lowering Twitter’s market value so Musk could renegotiate or abandon the purchase as Tesla’s stock value fell and the acquisition became more expensive. “This verdict protects investors and the integrity of public markets,” said lead plaintiffs’ attorney Joseph Cotchett, calling it a message that wealthy individuals must follow the law. Musk’s lawyers declined to comment after the verdict.
A central issue at trial was Musk’s repeated public claims that Twitter dramatically understated the prevalence of spam and fake accounts. Musk testified that the company’s disclosure that roughly 5% of accounts were bots was inaccurate and that Twitter’s leadership had mischaracterized how that figure was produced. He said those concerns were behind his effort to withdraw from the transaction.
Twitter had sued in Delaware to force Musk to complete the sale, and shortly before that trial was to begin, he reversed course and agreed to go through with the deal at the original price.
The San Francisco proceedings featured testimony from former Twitter executives, including then-CEO Parag Agrawal and CFO Ned Segal. Musk himself testified more than a day, disputing the board’s explanations about bot counts and saying he believed the company’s representations were untrue. He also argued that ultimately honoring the agreed price served the interests of most Twitter shareholders.
During the period of uncertainty, Twitter shares dropped below $33 — roughly 40% under the original deal price — harming shareholders who sold amid the turmoil, plaintiffs said. Musk’s legal team pushed back throughout the trial, noting he could not control individual investors’ decisions and stressing that shareholders who retained their stock were not harmed. In closing, plaintiffs’ counsel urged jurors to hold Musk accountable and provide compensation to those who lost money after relying on his tweets.
Musk’s lawyers repeatedly sought a mistrial, contending that anti-Musk sentiment in San Francisco prevented a fair proceeding. The verdict adds to Musk’s courtroom history involving public statements: in 2019 he testified about a 2018 tweet on taking Tesla private, and a jury in that earlier case did not find him liable.