A civil jury in California ruled on Friday that Elon Musk intentionally misled Twitter investors when he attempted to back out of his $44 billion acquisition of the platform in 2022. At the time, Musk had tweeted that Twitter had too many bots, which was his stated reason for later trying to renege on the deal. Twitter ultimately sued Musk to force him to complete the acquisition.
On May 13, 2022, Musk tweeted, “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.” In the days following this post, Twitter’s share price declined by 8%.
Investor Giuseppe Pampena filed a lawsuit against Musk on behalf of other former Twitter investors who had sold their shares between May 13, the day of the tweet, and October 4, when the acquisition was finalized. The lawsuit argued that Musk intentionally posted about his concerns to create uncertainty about Twitter’s stability and artificially drive down its stock price, causing losses for those who sold shares during that period. Musk’s attorneys contended he was expressing legitimate concerns about bots on the platform, but the jury found the plaintiff’s argument more convincing.
The amount Musk must pay to the former shareholders is not yet determined, but Pampena’s attorney stated damages could reach up to $2.6 billion. While significant, this is not a devastating financial blow for Musk, whose net worth is estimated at over $660 billion.
This is not Musk’s first legal challenge over his tweets. In 2018, he tweeted that he had secured funding to take Tesla private at $420 per share. The SEC alleged those posts were misleading and charged him with securities fraud. Musk testified that the $420 reference was not a marijuana joke and that he sincerely believed he would take Tesla private at that price, which represented a substantial premium. He ultimately emerged victorious in a subsequent shareholder lawsuit regarding that tweet, but this time he has been found liable.
After acquiring Twitter, Musk rebranded the company as X and later merged it with his artificial intelligence company, xAI. Musk stated the combined company was valued at $113 billion. Then, last month, SpaceX merged with xAI. Musk explained that merger was motivated by a desire to build data centers in space.