A federal jury in San Francisco ruled on Friday that Elon Musk made materially false or misleading statements that harmed Twitter investors in the run-up to his 2022 takeover of the social media company. The verdict covers a class-action lawsuit filed by shareholders who sold their stock at depressed prices during the uncertainty.
The nine-person jury found Musk liable on two specific tweets but cleared him of broader claims that he orchestrated a scheme to defraud investors or misled them in a related podcast appearance.
Jury Delivers Split Verdict After Three-Week Trial
Jurors deliberated for nearly four days following testimony that began on March 2. They concluded Musk’s public comments contributed to a sharp drop in Twitter’s share price, costing some investors who sold early.
The case centered on whether Musk’s words about fake accounts, or bots, crossed into securities fraud territory. Plaintiffs argued the statements were designed to pressure Twitter’s board and renegotiate the $54.20-per-share offer.
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| Closing arguments begin in Twitter shareholder trial |
Which of Musk’s Statements Were Deemed Misleading?
The jury pinpointed two tweets from May 2022 as the problem.
- On May 13, Musk posted that the Twitter deal was “temporarily on hold” pending confirmation that bots made up less than 5 percent of users, matching the company’s SEC filings.
- Days later, he claimed bots could be “much” higher than 20 percent and that the takeover could not proceed unless Twitter’s CEO proved the lower figure.
These posts sent shares sliding nearly 10 percent in one session and contributed to a broader decline of about 40 percent below the offer price.
The jury found a podcast comment from the same period was merely opinion and not actionable. It also rejected the idea of an intentional fraud scheme.
| Statement | Date | Summary | Jury Finding |
|---|---|---|---|
| Tweet 1 | May 13, 2022 | Deal “temporarily on hold” over bot levels | Liable – materially misleading |
| Tweet 2 | May 17, 2022 | Bots “much higher” than 20%; deal conditional on proof | Liable – materially misleading |
| Podcast comment | May 2022 | Related to bot concerns | Not liable – opinion only |
| Overall scheme | N/A | Deliberate plan to drive down price | Not liable |
How Did the Statements Affect Twitter’s Share Price?
Twitter shares traded as high as $51.70 shortly after the board accepted Musk’s April 2022 offer. By late summer they had fallen into the mid-$30s amid his repeated doubts about the platform’s user data.
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| Chart of Twitter stock price during Elon Musk Twitter acquisition | Fortune |
Shareholders who sold between May 13 and October 4, 2022 — the class period — claimed losses because they exited before Musk ultimately closed the deal at the original price in October. The company was later renamed X.
Why Did Former Shareholders File the Lawsuit?
The class action, known as Pampena v. Musk, was filed just before Musk completed the purchase. It represents retail investors, options traders and institutional holders who said Musk’s public waffling artificially depressed the stock to gain leverage.
Plaintiffs’ lawyers argued the tweets were not innocent concerns but moves that hurt ordinary investors with 401(k)s and pensions. Musk testified that Twitter had misrepresented its bot numbers and that he acted in good faith.
What Damages Could Musk Face and What Comes Next?
Lawyers for the shareholders estimate total damages at roughly $2.1 billion to $2.6 billion, based on per-share calculations of $3 to $8 for each affected trading day. Exact amounts will be determined in coming months through a claims process expected to take several months.
Musk’s legal team called the outcome “a bump in the road” and confirmed plans to appeal. They noted he has prevailed in similar high-stakes shareholder cases before.
The ruling sends a message that even high-profile executives must follow securities disclosure rules when their statements move markets, though it leaves open questions about how future social media posts by corporate leaders will be scrutinized. Claims administration is set to begin soon for eligible former Twitter holders.
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