Jury finds Elon Musk misled investors during Twitter purchase, absolves him of some fraud claims

A San Francisco jury has determined that Elon Musk misled investors regarding Twitter’s (now X) stock price in the months leading up to his $44 billion acquisition in 2022. The civil trial revolved around claims that Musk’s tweets and podcast comments in May 2022 intentionally defrauded shareholders who sold their stock based on his statements. While the jury found Musk liable for misleading investors with two specific tweets – including one stating the deal was “temporarily on hold” – they did not find evidence of intentional fraud or a “scheme” to mislead, absolving him of some allegations related to a podcast statement.

The core of the dispute centered on Musk’s assertions about the prevalence of bot accounts on Twitter. He claimed the platform had a significantly higher percentage of fake and spam accounts than the 5% disclosed in regulatory filings, using this as justification to initially attempt to withdraw from the purchase agreement. Twitter subsequently sued to enforce the original deal, but Musk ultimately reversed course and completed the acquisition.

The financial implications of the verdict remain unclear as it is a class-action lawsuit, but damages are expected to reach billions of dollars, distributed among thousands of shareholders, including institutional investors. The jury awarded shareholders between $3 and $8 per stock per day. Despite the potential payout, Musk’s current net worth, estimated at $814 billion, largely tied to Tesla shares, suggests the financial impact will be manageable.

(Source：The Philadelphia Inquirer)