A federal jury in California has found that tech giant Elon Musk misled investors of Twitter in 2022 through public statements made during his $44 billion acquisition of the company, according to court proceedings concluded on Friday.
The decision followed a civil class-action lawsuit, Pampena v. Musk, brought on behalf of shareholders who sold Twitter stock between May 13 and October 4, 2022. The trial was held in San Francisco and concluded after nearly three weeks, with a nine-member jury deliberating for three days before reaching its verdict.
Jurors found that two statements made by Musk on May 13 and May 17, 2022, were materially false or misleading. On May 13, Musk wrote that the acquisition deal was “temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.” Four days later, he stated that fake or spam accounts could account for “20%” of users and possibly “much higher,” without presenting supporting evidence.
According to the jury, these statements created uncertainty about the status and valuation of the deal, contributing to a decline in Twitter’s share price. Investors who sold stock during this period argued that they suffered financial losses as a result.
However, the jury did not find sufficient evidence to conclude that Musk engaged in a deliberate scheme to defraud investors. He was therefore found liable for making misleading statements but not guilty of intentional securities fraud.
Musk’s legal representatives from Quinn Emanuel Urquhart & Sullivan responded to the ruling, stating: “We view today’s verdict, where the jury found both for and against the plaintiffs and found no fraud scheme, as a bump in the road. And we look forward to vindication on appeal.”
Lawyers representing the shareholders spoke on the implications of the case. Attorney Francis Bottini said, “Musk’s status as the world’s richest man is not a free pass. If you’re able to move markets with your tweets you’re responsible for the harm you cause to investors.” Another plaintiffs’ lawyer, Joseph Cotchett, added that the verdict “sends a strong message that just because you’re a rich and powerful person, you still have to obey the law.”
Damages in the case have not been finalized, but estimates presented during the trial suggest that Musk could be required to pay between $2.5 billion and $2.6 billion. The calculation is based on losses incurred by shareholders, with jurors indicating a range of approximately $3 to $8 per share per day during the affected period.
The lawsuit was filed in October 2022, shortly after Musk moved forward with the acquisition at the original agreed price of $54.20 per share, despite earlier attempts to renegotiate or withdraw from the deal. He later rebranded Twitter as X in 2023.
Separately, Musk remains in discussions with the U.S. Securities and Exchange Commission over a related matter concerning disclosure of his initial share purchases in Twitter earlier in 2022.
Recent estimates from Forbes indicate that Elon Musk’s companies are performing unevenly but remain financially significant overall. SpaceX has become the main driver of value after its combination with xAI, with the merged business estimated at about $1.25 trillion, forming the largest share of Musk’s personal wealth, which is placed at over $800 billion. In contrast, Tesla continues to operate at large scale but is experiencing slower growth compared with previous years, while still investing in artificial intelligence and related technologies.
Musk, whose net worth is estimated at over $800 billion, is expected to challenge the jury’s decision through the appeals process.
