Elon Musk misled Twitter investors while trying to walk away from takeover, jury says

A California civil jury ruled on Friday that Elon Musk intentionally misled Twitter investors when he tried to back out of his $44 billion acquisition of the platform in 2022.

At the time, Musk tweeted that Twitter had too many bots, which is why he later tried to back out of the acquisition. (Twitter ended up suing Musk to force him to make the deal.)

“Twitter deal is temporarily on hold awaiting details supporting spam/fake accounts that already represent less than 5% of users,” Musk wrote on the platform, which he has since renamed to X.

In the days after Musk posted this, Twitter shares fell 8%. Investor Giuseppe Bambina filed a lawsuit against Musk on behalf of other former Twitter investors who sold Twitter shares between May 13 (the day of the tweet) and October 4, the day the deal was completed.

Bambina’s lawsuit argued that Musk intentionally spread his concerns with Twitter to create uncertainty about the platform’s stability to artificially lower its stock price, causing those who sold shares during that window to suffer losses. Musk’s lawyers argued that he was expressing legitimate concerns about the number of bots in the app. But the jury was more convinced by the plaintiff’s argument.

It’s not yet clear how much money Musk will have to pay to former Twitter shareholders, but Bambina’s lawyer said damages could reach $2.6 billion, according to CNBC. This isn’t a huge hit on Musk, as Bloomberg estimates his net worth at more than $660 billion.

This isn’t Musk’s first experience going to court over tweets. In 2018, he tweeted that he had secured financing to take Tesla private at $420 per share, meaning he planned to buy out public shareholders and delist the company from the stock exchanges. The Securities and Exchange Commission claimed that these posts were misleading, and charged Musk with securities fraud. Musk later had to testify in court that he was not making a marijuana joke (420 is a widely recognized slang reference for cannabis) and emphasized that he strongly believed he would take Tesla private at $420 per share, which represented a significant premium to Tesla’s stock price at the time.

Musk prevailed in a similar lawsuit brought by shareholders over the “secured funding” tweet, but this time, he will have to pay.

Following his acquisition of Twitter, Musk renamed the company to X, then merged it with his newer artificial intelligence company, xAI. The combined company is worth $113 billion, according to Musk. Then, last month, SpaceX merged with xAI. Musk said the merger was motivated by his desire to build data centers in space.