Elon Musk misled investors during Twitter takeover, US jury finds
Elon Musk Misled Investors During Twitter Takeover, US Jury Rules
A U.S. jury has ruled that Elon Musk intentionally lowered Twitter’s stock value in the months before his $44 billion takeover of the social media platform. The decision, reached in a San Francisco civil trial, addresses allegations that Musk’s actions misled shareholders who sold shares based on his public statements.
Key Details of the Case
The lawsuit, filed shortly before Musk assumed control of Twitter (now rebranded as X), centered on his claims regarding the platform’s bot accounts. Jurors were asked to determine whether two tweets and podcast remarks made in May 2022 constituted deliberate fraud. Musk argued that his concerns about the number of fake accounts were genuine, and that highlighting the issue did not indicate intent to deceive.
Bot Claims and Legal Implications
Musk’s defense hinged on his assertion that Twitter had misrepresented the proportion of spam and bot accounts. He cited a tweet in May 2022 stating his takeover could not proceed unless Twitter’s CEO confirmed bot levels were below 5%. The shareholders’ lawyer, Mark Molumphy, emphasized the impact of Musk’s statements: “He trashed the company. Trashed the executives. And tanked the stock.”
“He trashed the company. Trashed the executives. And tanked the stock,” said Mark Molumphy, the shareholders’ lawyer, during his closing argument.
The exact damages remain unclear, though estimates suggest billions. Musk’s wealth, currently valued at approximately $814 billion, is largely tied to Tesla shares. After initially backing out of the deal, Twitter sued to enforce the original terms, leading Musk to finalize the purchase in October 2022.
Additional Legal Matters
Musk is also involved in discussions to settle a separate U.S. Securities and Exchange Commission case. The SEC accused him of delaying disclosure of his early Twitter purchases to secure lower prices before revealing his strategy to investors.
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