Here's a lesson for anyone who moves markets with their tweets: you might have to pay for it. On Friday, a federal jury in San Francisco decided that Elon Musk did exactly that when he started talking about bots on Twitter shortly after agreeing to buy the company for $44 billion back in April 2022.
The jury found him liable for two specific statements. First, his claim that the deal was "temporarily on hold" pending verification of how many spam and fake accounts were on the platform. Second, his suggestion that fake accounts could actually exceed 20% of users. According to reports, the jurors decided those statements misled investors.
But it wasn't a complete loss for Musk. The jury also found that shareholders failed to prove a separate allegation—that he orchestrated a broader scheme to defraud them. So it's a mixed verdict, but one with potentially very expensive consequences.
How expensive? Damages haven't been finalized yet, but plaintiffs' attorney Francis Bottini threw out a number: losses could reach as high as $2.5 billion. The lawsuit represents a class of shareholders who say they sold Twitter stock at depressed prices between May and October 2022 because of Musk's public comments.
"Musk's status as the world's richest man is not a free pass," Bottini said. "If you're able to move markets with your tweets you're responsible for the harm you cause to investors." That's a pretty clear statement of the legal theory here: great power, great responsibility, and apparently great liability.
Not surprisingly, Musk's team sees things differently. His lawyers pushed back, arguing his concerns about bots were genuine and not fraudulent. In a statement, they called the verdict "a bump in the road" and said they expect to prevail on appeal. So this fight is far from over.
For those who need a quick refresher on how we got here: Musk ultimately did complete the acquisition of Twitter in October 2022 (he later rebranded it as X). But the path to that closing was rocky, filled with public drama, and apparently, according to this jury, some misleading statements along the way.
This case is just one of several legal challenges Musk has faced related to his public statements and business dealings. He's been down this road before with Tesla Inc. (TSLA) shareholders too. When you're as vocal as Musk is, and when markets actually listen to what you say, the legal system tends to pay attention as well.
