The world’s richest man was found liable for some allegations brought in a shareholder lawsuit in federal court, but found not guilty of a “scheme” to mislead investors.
The nine-person jury deliberated for three days, after hearing almost three weeks of testimony, including hours of testimony from Musk.
The damages that Musk must pay in the class action lawsuit aren’t clear, but could potentially reach billions of dollars. Musk has a net worth of roughly $814 billion and paid $44 billion to buy Twitter, now X.
Musk was found liable of misleading investors with two 2022 tweets, which included the claim that the deal was “temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.”
The plaintiffs alleged that statement was false because the deal was not on hold and Musk didn’t have the ability to delay it. The company’s stock price fell over 9% after Musk’s tweet and eventually dropped to 32% below Musk’s $44 billion deal price.
Investors who sued said they lost money by selling their Twitter shares at a lower price with the belief that Musk’s purchase wouldn’t close.
Twitter and Musk sued each other over after Musk sought to back out of the deal, but he ultimately bought the company in October 2022.
“This verdict sends a clear message — if you move the market with your words, you own the consequences,” said Monte Mann, a Chicago-based attorney at Armstrong Teasdale who wasn’t involved in the case. “The law has always prohibited misleading statements. What’s new is the scale and speed. When one person can move billions with a tweet, the consequences of those statements are amplified — and juries are starting to take that seriously.”
Musk has been sued over other tweets, including his 2018 post that he had “funding secured” to take Tesla private. He later won a lawsuit in 2023.
“Going forward, this will have a real chilling effect. Executives and dealmakers will need to think carefully about how public statements can be interpreted—not just as disclosure, but as part of the negotiation itself,” Mann said.