A federal jury in California found on Friday that tech titan Elon Musk misled Twitter shareholders in an effort to drive down the company’s share price as he was poised to buy it in a US$44 billion deal.
The verdict in a class action securities lawsuit means the world’s richest person could be ordered to pay out as much as US$2.6 billion, according to damages calculated by jurors.
Giuseppe Pampena filed the suit against Musk on behalf of people who sold Twitter shares between mid-May of 2022 and early October of that year.
Jurors agreed with the plaintiff that Musk violated a securities rule that bars false and misleading statements that artificially drive down a stock price, in this case that of Twitter, the verdict form showed.
The civil complaint accused Musk of driving down Twitter’s stock price to gain leverage to renegotiate the purchase price or get out of the deal completely, causing people who sold shares to lose money.
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Musk announces plans to turn Twitter into ‘X’ super-app similar to China’s WeChat
Musk announces plans to turn Twitter into ‘X’ super-app similar to China’s WeChat
Musk tweeted at one point during the process that the acquisition deal was temporarily on hold until Twitter executives could prove the percentage of “bots” – fake accounts run by software instead of real users – was as low as the social media platform claimed.