California: In a significant legal development, Elon Musk has been found liable by a nine-person jury over tweets he posted in May 2022 that affected the stock price of Twitter.
The verdict came after a three-week trial, where jurors unanimously agreed that Musk’s tweets contained materially false statements. These statements were found to have artificially driven down Twitter’s share price, causing financial losses for investors.
The controversy stemmed from Musk’s claim that his acquisition deal for Twitter was “temporarily on hold” due to concerns over fake accounts and bots on the platform.
Following this statement, Twitter’s stock price dropped by approximately 10 percent in a single trading session.
Investors argued that Musk’s remarks prompted them to sell their shares at deflated prices, leading to substantial financial damage. The lawsuit was filed by shareholders who sold Twitter stock between mid-May and early October 2022.
While the jury concluded that Musk violated securities laws by making misleading statements that impacted stock prices, they stopped short of finding him guilty of broader fraud charges.
Jurors determined that Musk did not engage in a coordinated “scheme” to deceive investors.
Plaintiffs’ attorneys estimated total damages at around $2.6 billion. Jurors suggested that affected shareholders should be compensated between $3 and $8 per share for each day within the class action period.
Following the verdict, Musk’s legal team announced plans to appeal the decision, describing it as merely a “bump in the road.” Lawyers from Quinn Emanuel stated they are confident the ruling will be overturned on appeal.
This ruling marks a rare legal setback for Musk, who was previously acquitted in 2023 in a similar case brought by Tesla shareholders over his 2018 tweets regarding taking the company private.