A jury in a San Francisco court has concluded that Elon Musk deliberately misrepresented information to investors about Twitter Inc. (now X) in a bid to decrease the company’s stock value before his takeover. The jury’s conclusions could lead to Musk incurring substantial financial repercussions, possibly totaling billions of dollars.
The litigation focused on Musk’s public remarks made in 2022, especially his assertions that Twitter had an inflated number of fake accounts. These claims were made after Musk proposed purchasing Twitter for $54.20 per share, which valued the company at roughly $44 billion, even though its market capitalization was about $36 billion at the time. After making his offer, Musk sought to back out of the agreement several times, raising concerns about the quantity of bots on the service. Ultimately, Twitter sued Musk to enforce the acquisition, which he did finalize.
Afterward, Musk faced accusations of deceiving investors by criticizing the company in a way that was purportedly designed to lower its stock price. The jury determined that Musk’s remarks did indeed lead to a significant decline in Twitter’s stock, which plummeted to a low of $32.52 in July 2022, marking a 40% drop from his buyout price.
The jury’s ruling indicates that Musk may be responsible for damages assessed based on how much his statements influenced the stock price over a five-month timeframe. The total amount of damages owed to individual investors will be calculated later as shareholders file their claims, with projections indicating that the sum could soar to $2.6 billion.
Musk has not given any public statement regarding the verdict but may opt to appeal the ruling. For more information, Bloomberg’s comprehensive report on the case is available on their website.