Jury Verdict on Elon Musk's Twitter Takeover Statements
Elon Musk was found to have been misleading in his public statements during a critical phase of his 2022 acquisition of Twitter, according to a unanimous jury verdict in a San Francisco federal court.
After deliberating for two days, the jury ruled against Musk, who faced a lawsuit from a group of Twitter investors claiming they relied on his public statements. Musk had testified earlier in the month, denying any intent to mislead investors and asserting that the public overinterpreted his comments and tweets.
Contrary to Musk's defense, the jury determined that some of his public claims regarding issues with Twitter's user metrics, as well as indications that he might withdraw from the $44 billion acquisition, were intentionally misleading.
Requests for comment from Musk's legal team and the investors’ attorneys, led by Brian Belgrave, a small-business owner from Oregon, were not returned.
Previous Legal Challenges and Impact on Stock Price
This is not Musk's first encounter with legal issues related to his social media posts. In 2023, he successfully defended against a lawsuit from Tesla shareholders who alleged that his tweets had misled them about the car company.
In the recent verdict, the San Francisco jury found that Musk's public statements artificially depressed Twitter's stock price by approximately $5 to $8 per share, lowering it to around $3 per share during the period from May to October 2022.
This decline could result in substantial damages for each investor in the class, potentially amounting to thousands of dollars per individual.
Monte Mann, a trial attorney specializing in business litigation at Armstrong Teasdale, commented on the verdict, stating,
"If you move the market with your words, you own the consequences."
Timeline of Musk's Public Statements and Twitter Acquisition
Beginning in May 2022, Musk tweeted about alleged problems with fake accounts, or "bots," on Twitter and announced that the acquisition deal was "on hold." He later indicated his intention to withdraw from the agreement altogether.
In response, Twitter initiated legal action to compel Musk to complete the purchase. Musk ultimately proceeded with the acquisition in early October 2022 at the originally agreed price. The following year, he rebranded the platform as X.
The months of uncertainty and public statements had financial repercussions for investors like Brian Belgrave, who traded Twitter shares during that period.
Belgrave testified that he sold thousands of Twitter shares in July 2022, influenced by Musk's public posts suggesting the deal would not proceed. He stated,
"I got screwed," Belgrave said. "I got cheated."
Belgrave's sale price was below his purchase price from a few months earlier and significantly less than the $54.20 per share Musk ultimately paid.
Musk's Courtroom Demeanor
During his testimony, Musk was notably combative with the lawyers representing the investor class. He frequently declined to answer questions with simple "yes" or "no" responses, accusing the attorneys of attempting to mislead the jury.
At one point, Musk conceded,
"If this was a trial on whether I've made stupid tweets, I'd say I'm guilty."
