Elon Musk misled investors during Twitter takeover, US jury finds
Elon Musk misled investors during Twitter takeover, US jury finds
A U.S. jury has ruled that Elon Musk deliberately misled investors by manipulating Twitter’s stock price in the months before acquiring the social media platform for $44 billion. The decision marks a significant moment in the legal battle over his takeover, which he later rebranded as X.
Despite the finding, Musk was exonerated from certain fraud charges in the civil trial held in San Francisco. The case revolved around a class-action lawsuit filed shortly before he took control of Twitter, which aimed to hold him accountable for his statements that influenced shareholder decisions.
Jurors were tasked with determining whether Musk’s remarks on a podcast in May 2022 constituted fraud. He claimed the company’s bot percentage—accounting for fake accounts—had to drop below 5% for the deal to proceed. His lawyer, Mark Molumphy, emphasized during the closing argument that Musk’s actions led to a decline in the stock’s value, impacting shareholders.
“He trashed the company. Trashed the executives. And tanked the stock,” Molumphy stated.
Conversely, Musk’s legal team argued that his concerns about bots were genuine, and his public criticisms did not indicate fraudulent intent. The company had previously argued that Musk used Twitter’s misrepresentation of fake accounts as a justification for backing out of the purchase agreement.
The outcome is still pending on the exact damages Musk must pay to thousands of affected shareholders. While the amount remains unclear, it could reach into the billions. His current net worth stands at approximately $814 billion, largely held in Tesla shares.
The trial also highlighted Musk’s assertion that Twitter had underreported the number of automated accounts, which he claimed were central to his decision to withdraw from the deal. This issue became a focal point for both sides during the proceedings.
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Separately, Musk is negotiating a settlement with the U.S. Securities and Exchange Commission over allegations that he delayed disclosing his early Twitter stock purchases to profit from low prices before informing investors.
