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In a significant legal development on Friday, a jury determined that Elon Musk had misled Twitter shareholders, impacting the company’s stock price in the lead-up to his $44 billion acquisition of the platform in 2022.
The San Francisco jury scrutinized two specific tweets and a podcast comment made by Musk to assess whether they constituted deliberate deception aimed at reducing Twitter’s stock value. While the jury concluded that the tweets were indeed false and misleading, they did not assign liability to Musk for his podcast remarks.
Furthermore, the jury rejected the investors’ assertion that Musk’s statements amounted to a coordinated scheme. This decision emerged from a lawsuit filed by four shareholders in October 2022, who argued that Musk’s public remarks about spam bot accounts on Twitter, now rebranded as X, led to substantial financial losses for them.
The legal representatives of these shareholders indicated on Friday, as reported by The New York Times, that Musk might be liable to compensate former shareholders approximately $2.5 billion.
Joseph Cotchett, an attorney representing the investors, emphasized the broader implications of the case. He told CNBC, “This serves as a prime example of what should not be done to everyday investors—those with 401ks, families, and those in essential public service roles like teachers, firefighters, and nurses. The focus of this case went beyond Musk; it was about ensuring fairness in the entire operation.”
Musk’s attorneys told CNBC that they “look forward to vindication on appeal,” calling the jury’s verdict a “bump in the road.”
The Hill has reached out to X for comment.
Musk was previously sued by Twitter shareholders in April 2022 after they claimed that the delayed disclosure of his stake in the social media company was a “mistake.” Musk’s lawyers argued in July 2024 that the delay was a simple error.
Following his purchase of Twitter, Musk became the social media company’s largest shareholder after purchasing a 9.2 percent ownership stake.
The Securities and Exchange Commission (SEC) also investigated Musk’s purchase of Twitter into whether any federal security laws had been violated in connection with the purchase. The tech billionaire agreed to testify but later sought to have the case dismissed. His lawyers argued that there was “no harm” done in disclosing his share of Twitter.
The SEC then sued Musk in January 2025, claiming that he allegedly withheld information that allowed him to underpay for the shares “after his financial beneficial ownership report was due.”
Musk attempted to move the case out of Washington, D.C., but a federal judge denied his request.