A San Francisco jury has concluded that Elon Musk deliberately misled investors by intentionally driving down Twitter’s stock price in the months prior to his $44 billion acquisition of the social media platform in 2022. However, the jury cleared Musk of some fraud allegations, ruling that he did not engage in a “scheme” to deceive shareholders.
The civil trial centered on a class-action lawsuit filed just before Musk took control of Twitter, which he later rebranded as X. Jurors deliberated for nearly four days before reaching their verdict, which followed a trial that began on March 2. They determined that Musk was liable for misleading investors through two tweets—one stating that the Twitter deal was “temporarily on hold”—but found that a statement he made on a podcast in May 2022 did not constitute intentional fraud or scheming.
The jury awarded damages amounting to approximately $2.1 billion, based on shareholders’ claims that Musk’s tweets caused stock prices to decline by about $3 to $8 per share daily. At the time, Musk’s net worth was estimated at around $814 billion, largely tied to Tesla shares.
Legal representatives for the plaintiffs hailed the verdict as a “victory for investors and the public markets,” emphasizing that no individual—regardless of wealth or status—should be above the law. Musk’s attorneys declined to comment as they left the courtroom.
Much of the trial addressed Musk’s claims about the prevalence of fake and spam accounts on Twitter. Musk argued that Twitter’s disclosed figure of 5% fake accounts was inaccurate and used this contention to justify pulling out of the deal. Twitter sued Musk in Delaware to enforce the agreement, which he initially sought to back out of before ultimately agreeing to proceed with the original purchase price.
The core issue was whether Musk’s tweets, including one from May 13, 2022, indicating the deal was “on hold,” were part of a calculated effort to manipulate Twitter’s stock price. The jury found that while Musk did mislead investors with two tweets, his comments on the podcast were deemed opinions and thus not fraudulent. They also concluded that Musk did not engage in a scheme to intentionally cause a decline in Twitter’s shares.
The trial featured testimonies from former Twitter executives, including CEO Parag Agrawal and CFO Ned Segal, as well as Musk himself, who testified for over a day. Musk maintained that Twitter’s leadership had misrepresented the number of fake accounts and withheld critical information about bot calculations. He described Twitter’s data as “BS,” asserting he believed the platform’s claims about only 5% of accounts being bots.
Musk also argued that his decision to proceed with the purchase at the original price benefited Twitter shareholders, despite the share price falling below $33—around 40% less than the agreed purchase price—during the period of uncertainty. Plaintiffs contended that Musk’s tweets, driven by declining Tesla stock and mounting costs to buy Twitter, were strategically aimed at lowering Twitter’s stock to renegotiate or exit the deal.
In closing arguments, plaintiffs’ lawyer Mark Molumphy urged jurors to hold Musk accountable for the financial losses suffered by investors, emphasizing that Musk was aware of what he was doing when he posted the “on hold” tweet. Musk’s legal team filed multiple motions for mistrial, citing biases against him in San Francisco.
This case marks another instance of Musk facing legal scrutiny over his social media conduct. Three years ago, he testified in a separate trial about his failed plans to buy Tesla at $420 per share, which resulted in an acquittal.