A federal jury in San Francisco on Friday determined that Elon Musk is liable for securities fraud after misleading Twitter shareholders with statements made during his contentious 2022 takeover of the social media platform.
The nine-person jury delivered a mixed verdict following nearly four days of deliberation in the closely watched class-action lawsuit. Musk was held responsible for two specific tweets from May 2022 — including his widely publicized post declaring the $44 billion deal was “temporarily on hold” over concerns about fake accounts, or “bots.” Jurors concluded those statements were false or misleading and depressed the stock price, harming investors who sold shares during the period of uncertainty.
However, the jury cleared Musk of a broader “scheme” to defraud shareholders and ruled that his related podcast comments constituted protected expressions of opinion rather than actionable facts.
The case centered on allegations that Musk deliberately talked down Twitter’s value in an attempt to renegotiate or walk away from the acquisition. Musk’s defense team maintained that his bot concerns were legitimate and pointed out that he ultimately completed the deal at the original price in October 2022. The jury disagreed on the impact of his public comments, finding they unfairly influenced the market between May 13 and October 4, 2022, when Twitter shares at one point traded 40% below the buyout offer.
Damages Could Reach $2.1 Billion to $2.5 Billion
Plaintiffs’ attorneys estimate Musk could face damages between $2.1 billion and $2.5 billion. The jury awarded shareholders between $3 and $8 per share for each day their holdings were affected during the relevant trading window. The class includes thousands of institutional investors and retail traders who sold at depressed prices.
Musk, whose net worth is currently estimated at approximately $814 billion, is expected to appeal the verdict. His legal team described the outcome as “a bump in the road” and signaled plans to challenge both liability and damages in post-trial motions before the case potentially heads to the 9th U.S. Circuit Court of Appeals.
$2.6B Damages and Appeal Process Explained
The ruling marks a rare setback for Musk in his legal battles related to the Twitter deal and sets a notable precedent for how high-profile executives’ social media statements can be scrutinized for their market-moving effects. It comes as Musk separately negotiates a potential settlement with the Securities and Exchange Commission over his delayed disclosure of his initial Twitter stake in early 2022.
Plaintiffs’ lead counsel Joseph Cotchett hailed the decision outside the courthouse as “a victory for the public markets,” emphasizing that “no individual is above the law, regardless of wealth.”
Analysts note that while Musk prevailed in an earlier “Funding Secured” securities case tied to the same acquisition, this outcome underscores growing regulatory attention to executive communications on platforms like X (formerly Twitter).
Victory or Just the Beginning? Inside the Musk vs. Investors Saga
- Musk’s attorneys are expected to file motions to overturn or reduce the verdict before final judgment.
- Any appeal could take a year or longer to resolve.
- Separate damages proceedings will determine the exact payout amount.
This verdict closes one chapter in the long-running legal saga surrounding Musk’s transformation of Twitter into X, but the appeals process ensures the story is far from over.
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