A federal jury in San Francisco has ruled against the billionaire entrepreneur in the high-profile Elon Musk Twitter investor lawsuit. On Friday, the nine-person jury found Musk liable for misleading shareholders during his chaotic $44 billion acquisition of the social media platform in 2022. The verdict marks a significant legal defeat for the world’s richest person, concluding a closely watched civil trial that began on March 2.
The class-action lawsuit accused Musk of deliberately manipulating the market to drive down the company’s stock price. Investors claimed he intentionally disparaged the platform to either renegotiate the purchase price or back out of the deal entirely. After nearly four days of deliberation, jurors concluded that Musk’s public statements about fake accounts defrauded shareholders who sold their stock at artificially depressed prices between May 13 and October 4, 2022.
False Statements on Fake Accounts
During the trial, the jury heard live testimony from Musk, his close advisors, and former top executives at the social media company. The central focus of the dispute was a series of comments Musk made shortly after agreeing to the takeover in April 2022. He repeatedly questioned the company’s internal data, which estimated that less than five percent of its daily active users were spam or bot accounts. This dispute ultimately led the company’s board of directors to sue him to force the transaction through.
Jurors specifically found Musk liable for two distinct statements published on his own social media profile. In one instance, he declared that the multibillion-dollar purchase was “temporarily on hold” until he received confirmation that bots made up less than five percent of the user base. In another post, he claimed the percentage of fake accounts could be “much” higher than 20 percent, insisting the takeover could not proceed unless the platform’s chief executive proved the figure was lower.
Throughout the proceedings, lawyers representing the investors argued that Musk had no legitimate basis to question the internal data. Former executives testified that they had provided the billionaire with all the requested information to support their estimates. By publicly casting doubt on the company’s metrics, Musk influenced investors to sell their shares at lower prices while he prepared to finalize the acquisition.
Mixed Verdict and Potential Damages
While the jury ruled against Musk on the two social media posts, the verdict was not a complete victory for the plaintiffs. The jury rejected two of the four fraud claims presented in the case. They determined that a separate statement Musk made during a podcast did not mislead investors, as it was legally considered an expression of personal opinion rather than a factual claim.
Additionally, the jurors found that the shareholders failed to prove Musk engaged in a broader, intentional scheme to defraud them. Despite these partial legal victories for the defense, the financial consequences for the billionaire remain severe. The jury awarded the affected shareholders between $3 and $8 per stock per day as damages.
The exact financial penalty is still being finalized, but legal representatives for the plaintiffs estimate that the total damages could range from $2.1 billion to $2.6 billion. The lawsuit was initially filed by investor Giuseppe Pampena on behalf of those who suffered financial losses. In federal court, the losing side has the right to appeal the decision, though Musk’s legal team declined to comment in the courtroom immediately following the verdict. Musk also did not issue an immediate public response.
A Warning to Public Markets
The outcome of the trial carries major implications for corporate accountability and market manipulation. Plaintiff attorney Joseph Cotchett called the decision an important victory for both the investors and the broader public markets. “I think the jury’s verdict sends a strong message that just because you’re a rich and powerful person, you still have to obey the law, and no man is above the law,” he stated.
Francis Bottini, another lawyer representing the shareholders, echoed this sentiment following the verdict. “Musk’s status as the world’s richest man is not a free pass,” he emphasized.
Musk’s personal fortune is currently estimated at approximately $814 billion, with much of his wealth tied up in his other corporate ventures. The multi-billion dollar payout, while massive by standard corporate measures, represents only a small fraction of his total net worth.
The legal troubles surrounding the 2022 social media takeover are not entirely resolved. Beyond this civil verdict, Musk is also engaged in discussions to settle a separate civil lawsuit with the United States Securities and Exchange Commission. That regulatory case accuses him of unlawfully delaying the public disclosure of his initial stake in the social media company in early 2022, a move that allegedly allowed him to purchase additional shares at lower prices before the market was aware of his involvement.
