Elon Musk, CEO of Tesla and holder of an $814.3 billion fortune, just got a $2.1 billion wake-up call. A federal jury in San Francisco found Musk liable for misleading Twitter investors ahead of his $44 billion acquisition of the social media giant in 2022.
Misled Investors
The case focused on Musk’s May 2022 tweets, in which he said the deal was “temporarily on hold” and raised concerns about the number of bots on the platform. Investors argued those statements drove down Twitter’s stock price, prompting them to sell at a loss, NPR reported. While Musk said he was simply expressing his views, jurors agreed with shareholders who claimed the comments were part of an effort to push for a lower purchase price.
Musk, the world’s richest man, testified he believed up to 90% of tweets he saw were from spam accounts and denied trying to manipulate the market. “If somebody had simply held on to their position … the vast number of people benefited greatly from the acquisition,” he claimed, shrugging off the $2.1 billion liability. The maximum payout could reach $2.6 billion when factoring in stock options, plaintiffs’ lawyers said.
The trial, which went on for nearly three weeks, included testimony from former Twitter executives, including CEO Parag Agrawal and CFO Ned Segal, and featured Musk on the stand for more than a day defending his controversial social media tactics.
Attorney Mark Molumphy called the verdict “a strong message that just because you’re rich and powerful, you still have to obey the law,” The New York Times reported.
Shares of Twitter, which Musk later renamed X, drastically dropped nearly 18% between his tweets in May 2022, costing early sellers millions. The jury’s ruling, while stopping short of finding an outright fraud “scheme,” could be one of the largest securities verdicts in U.S. history.
