Elon Musk misled investors during Twitter takeover, US jury finds

Elon Musk misled investors during Twitter takeover, US jury finds

A U.S. jury determined Elon Musk intentionally reduced Twitter’s stock value in the months prior to his $44 billion acquisition of the social media company. The verdict came from a civil trial held in San Francisco, where Musk was cleared of certain fraud allegations.

Class-action lawsuit and key claims

The case hinged on a lawsuit filed before Musk took control of Twitter, which he rebranded as X. Jurors assessed whether two tweets and podcast comments from May 2022 constituted deliberate deception against shareholders who sold their shares based on Musk’s statements.

“He trashed the company. Trashed the executives. And tanked the stock,” declared Mark Molumphy, representing the shareholders, during closing arguments.

Bot percentage dispute and legal arguments

Musk’s defense centered on his concerns about the number of fake accounts, or bots, on Twitter’s platform. His legal team argued that the billionaire’s criticism was genuine and did not indicate fraudulent intent. The court highlighted Musk’s claim that Twitter’s CEO had misrepresented the bot ratio, which he cited as a reason to withdraw from the deal.

Despite backing out initially, Twitter pursued legal action to enforce the original purchase terms. Musk eventually agreed to the deal, finalizing the acquisition in October 2022.

Separately, Musk is in discussions to resolve a U.S. Securities and Exchange Commission lawsuit, which alleges he delayed disclosing early Twitter stock purchases to profit from low prices before investors reacted.

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