In a civil trial in California, a federal jury concluded that Elon Musk sent tweets in 2022 that were materially false or misleading and that these tweets artificially depressed Twitter stock while he was already committed to buying the company. The case was brought on behalf of shareholders who sold Twitter shares between May 13 and October 4, 2022.

What the jury decided

The verdict split the difference. Key findings included:

  • Misdleading messages: The jury found two tweets from May 2022 to be materially false or misleading. One said the Twitter deal was temporarily on hold pending proof that spam and fake accounts made up less than 5 percent of users. The other suggested Twitter’s user base could be about 20 percent fake or spam and said the deal could not move forward until the company proved otherwise.
  • No fraud scheme: Jurors also decided Musk was not liable for engaging in a scheme to defraud investors.

Case background and possible damages

The class action, filed as Pampena v. Musk, covered investors who sold their shares during the window when those tweets were public. Musk had agreed in April 2022 to buy Twitter for 54.20 per share, a deal valuing the company at about 44 billion. He then spent months trying to back out before finally completing the purchase at the original price.

Lawyers for the shareholders estimate damages could reach roughly 2.5 billion. Musk’s legal team described the mixed verdict as a setback but said they expect to pursue appeals.

Other context and related matters

  • Musk’s response and status: His lawyers said the jury’s mixed findings were just a bump in the road and signaled plans to seek vindication on appeal.
  • SEC action: Separately, Musk is in discussions to settle a Securities and Exchange Commission lawsuit that alleges he failed to properly disclose early purchases of Twitter stock in 2022. Regulators estimate that undisclosed purchases may have cost other shareholders about 150 million.
  • Corporate moves: In July 2023 Musk renamed Twitter to X. More recently his SpaceX acquired his artificial intelligence company xAI. The combined valuation of that deal was reported at about 1.25 trillion, with SpaceX at roughly 1 trillion and xAI at roughly 250 billion.

What comes next

The judgment opens a path for damages to be calculated and for appeals. With the jury declining to find a fraud scheme, both sides have room to challenge parts of the ruling. Expect further court filings and an appeals process before this matter is finally settled.