Jury finds Elon Musk misled investors during Twitter purchase, absolves him of some fraud claims

A San Francisco jury has found Elon Musk liable for defrauding investors by deliberately driving down Twitter’s stock price during his tumultuous $44 billion acquisition of the social media platform in 2022. The verdict comes after nearly four days of deliberation in a closely watched trial that began on March 2.

The civil case centered on statements Musk made in the months leading up to his purchase of Twitter, which he later renamed X. While jurors determined that two of Musk’s tweets constituted investor fraud—including one claiming the Twitter deal was “temporarily on hold”—they did not find him liable for statements made during a podcast appearance. Importantly, the jury also absolved Musk of orchestrating a deliberate “scheme” to defraud investors.

Shareholders who sold their Twitter stock during the period in question will receive damages ranging from approximately $3 to $8 per share per day. According to plaintiffs’ attorneys, this amounts to roughly $2.1 billion in stock damages and an additional $500 million in options—a significant but manageable sum for Musk, whose current fortune is estimated at around $814 billion, though much of it is tied up in Tesla shares.

“It’s an important victory, not just for investors of Twitter, but for the public markets,” said Joseph Cotchett, an attorney for the plaintiffs. “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.”

Musk’s legal team has already indicated plans to appeal the verdict, referring to it as “a bump in the road” and citing recent legal victories in other cases. “We look forward to vindication on appeal,” his attorneys from Quinn Emanuel Urquhart & Sullivan stated.

A key focus of the trial was Musk’s claims about automated accounts on Twitter. The tech billionaire testified that Twitter had significantly more fake and spam accounts than the 5% disclosed in regulatory filings—an assertion he used to justify attempting to back out of the deal. After Twitter took legal action in Delaware to enforce the agreement, Musk ultimately completed the purchase at the original price.

The central question before the jury was whether Musk deliberately tweeted misleading information to manipulate Twitter’s share price after he became concerned about the cost of the acquisition. The plaintiffs argued that as Tesla’s stock price declined, making the Twitter purchase more expensive, Musk strategically released statements to drive down Twitter’s share price in hopes of renegotiating or abandoning the deal.

During the nearly three-week trial, former Twitter executives including CEO Parag Agrawal and CFO Ned Segal testified alongside Musk, who spent more than a day on the witness stand. In his testimony, Musk insisted that Twitter’s leadership had misrepresented bot numbers and withheld critical information about how fake account figures were calculated. He repeatedly characterized Twitter’s 5% bot claim as “BS.”

Musk also contended that shareholders who held onto their stock through the completion of the deal ultimately benefited from his purchase at the original price. However, Twitter’s shares fell below $33—approximately 40% below Musk’s purchase price—while the deal was uncertain, causing significant losses for shareholders who sold during this period.

In closing arguments, plaintiffs’ attorney Mark Molumphy urged jurors to hold Musk accountable, arguing his tweets were “carefully calculated to drive down Twitter’s stock price” rather than innocent mistakes.

Throughout the trial, Musk’s legal team repeatedly motioned for a mistrial, claiming the billionaire CEO couldn’t receive a fair trial in San Francisco due to public animosity toward him.

This isn’t Musk’s first battle in court over his social media communications. Three years ago, he was acquitted by a San Francisco jury in a case involving tweets about a proposed 2018 deal to take Tesla private at $420 per share—a transaction that never materialized.

Monte Mann, a business litigation lawyer not involved in the case, observed that the “verdict sends a clear message—if you move the market with your words, you own the consequences.” He added, “When one person can move billions with a tweet, the consequences of those statements are amplified—and juries are starting to take that seriously.”