A civil jury in California determined that Elon Musk intentionally misled Twitter investors when he attempted to withdraw from his $44 billion acquisition of the platform in 2022. Musk had tweeted about the excessive number of bots on Twitter, which was cited as the reason for his hesitation in the deal. Twitter subsequently sued Musk to compel him to complete the acquisition.
“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk tweeted.
Following Musk’s tweet, Twitter shares fell by 8%. Investor Giuseppe Pampena filed a lawsuit on behalf of other former Twitter investors who sold their shares between the date of Musk’s tweet, May 13, and October 4, when the deal was finalized.
Pampena’s lawsuit claimed that Musk purposely created uncertainty about Twitter’s stability to manipulate its stock price downward, harming those who sold shares in that period. Musk’s lawyers defended his tweet as expressing genuine concerns about bots. However, the jury sided with the plaintiff’s interpretation.
It remains unclear how much Musk will owe the former Twitter shareholders, though Pampena’s attorney suggested damages could reach $2.6 billion, according to CNBC. With Bloomberg estimating Musk’s net worth at over $660 billion, this amount isn’t significantly damaging.
Previously, in 2018, Musk faced legal issues over a tweet about securing funding to take Tesla private, leading to an SEC charge for securities fraud. Musk testified that he genuinely believed in taking Tesla private at a premium price, denying any intention of a marijuana reference.
Unlike the Tesla case, where Musk prevailed, he faces financial consequences this time. After acquiring Twitter, he rebranded it as X and merged it with his AI company, xAI, valuing the combined entity at $113 billion. Last month, SpaceX merged with xAI, motivated by Musk’s goal to build space-based data centers.