Musk issued false and misleading statements in tweets posted in May 2022. The class action suit was filed by investor Giuseppe Pampena.
By Frank Ulom
SAN FRANCISCO (CONVERSEER) – A federal jury in San Francisco has found billionaire entrepreneur Elon Musk liable for misleading shareholders of Twitter during his $44 billion acquisition of the platform.
The verdict, delivered on Friday after a three-week trial at a federal court in California, concluded that Musk issued false and misleading statements in tweets posted in May 2022. Jurors determined that the posts influenced market perceptions and contributed to a decline in Twitter’s share price at a critical stage of the takeover process.
The class action suit was filed by investor Giuseppe Pampena on behalf of shareholders who sold their stock between mid-May and early October 2022. The period was marked by uncertainty over whether Musk would proceed with the acquisition.
Jurors agreed that Musk violated United States securities laws prohibiting deceptive statements capable of influencing stock prices. Legal representatives for the plaintiffs estimated potential damages at approximately $2.6 billion, exposing the tech billionaire to a substantial financial penalty if the ruling is upheld.
At the centre of the case were Musk’s public claims that the acquisition was temporarily “on hold” pending verification of fake or automated accounts on the platform. Plaintiffs argued that the statements were deliberately made to depress Twitter’s valuation, giving Musk leverage to renegotiate the purchase price or withdraw from the deal.
At the time, Musk was also under pressure from declining shares in Tesla, raising concerns about how he would finance the acquisition without selling additional stock.
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Despite attempts to exit the agreement, Musk completed the purchase in October 2022 after Twitter initiated legal proceedings to enforce the deal. He subsequently rebranded the platform as X.
Musk’s legal team has rejected the verdict, describing it as a temporary setback and confirming plans to appeal.
The judgment represents a rare courtroom loss for Musk, who has previously prevailed in several high-profile legal disputes. He was cleared earlier the same day in a separate defamation case in Texas and won a similar shareholder lawsuit in 2023 linked to his 2018 tweets about taking Tesla private.
According to Forbes estimates as of early March, Musk remains the world’s richest individual, with a net worth of about $839 billion, largely tied to his holdings in Tesla and SpaceX.
