BY COMFORT OGBONNA
A U.S. federal jury has found Elon Musk liable for defrauding shareholders of Twitter during his high-profile $44 billion takeover bid in 2022. The verdict, delivered in a San Francisco federal court, marks a significant development in a closely watched legal battle surrounding Musk’s conduct during the acquisition process.
The case centered on allegations that Musk used public statements, particularly on social media, to cast doubt on Twitter’s reported number of fake and spam accounts—commonly referred to as bots. Shareholders argued that these statements were misleading and intentionally designed to drive down the company’s stock price, giving Musk leverage to renegotiate the deal or potentially withdraw from it altogether.
Although the jury determined that Musk was liable for certain misleading statements, the exact financial damages have not yet been finalized. Francis Bottini, a lawyer representing the shareholders, estimated that compensation could reach as much as $2.5 billion. He emphasized that Musk’s influence over markets carries responsibility, noting that public statements capable of moving stock prices must be made with accuracy and care.
Musk’s legal team, including attorneys from Quinn Emanuel Urquhart & Sullivan, downplayed the verdict, describing it as a temporary setback. They indicated plans to challenge the decision through an appeal, expressing confidence that the outcome could ultimately be reversed.
The civil trial began on March 2, with jury deliberations starting earlier in the week before the final decision was reached. The proceedings drew widespread attention due to Musk’s global profile and the broader implications for corporate governance and market transparency.
At the heart of the case were three specific statements Musk made shortly after agreeing to acquire Twitter in April 2022. These statements questioned whether the platform was significantly overrun with bots. Jurors concluded that two of those statements were misleading. One suggested that the deal was “temporarily on hold” pending verification that bots accounted for less than 5% of users. Another claimed the true figure could be far higher—possibly exceeding 20%—and implied the acquisition might not proceed without proof from Twitter’s leadership.
However, the jury did not find sufficient evidence to support a broader claim that Musk orchestrated a deliberate scheme to defraud investors. His defense team argued that his concerns about bots were genuine and that raising such issues publicly did not constitute fraudulent intent.
The lawsuit represents investors who sold their Twitter shares between May and October 2022, a period during which they claim Musk’s statements artificially depressed the stock price. These shareholders argue they suffered financial losses as a result of market reactions to his comments.
Despite the legal challenges, Musk ultimately completed the acquisition in October 2022 and later rebranded the platform as X. The transformation marked a new chapter for the company, though it has remained under intense scrutiny.
This case is one of several legal battles Musk has faced involving shareholder disputes. In previous cases, including a 2023 trial involving Tesla investors and separate litigation in Delaware over his compensation package, Musk successfully defended himself against allegations of misconduct.
Beyond this case, Musk is also engaged in discussions to resolve a civil lawsuit brought by the U.S. Securities and Exchange Commission. That case alleges he delayed disclosing his initial purchases of Twitter shares in 2022, enabling him to acquire additional stock at lower prices before the market became aware of his growing stake.
In another major business development, Musk’s aerospace company SpaceX recently acquired his artificial intelligence venture xAI, which had been integrated with X. The deal reportedly created one of the world’s most valuable private companies, with an estimated valuation of $1.25 trillion at the time.
The jury’s ruling adds a new layer of complexity to Musk’s business empire, raising fresh questions about the intersection of social media influence, corporate leadership, and financial accountability.
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