Federal jury finds Elon Musk's tweets misled Twitter investors, exposing $2.6 billion liability

A federal jury in San Francisco found Friday that Elon Musk misled Twitter shareholders with two false tweets during his 2022 takeover of the platform, a verdict that could expose him to roughly $2.6 billion in damages.

The nine-person jury, after deliberating for several days following a three-week trial, concluded that two tweets Musk posted in May 2022 contained false statements that artificially depressed Twitter's stock price. The case, Pampena v. Musk, was brought on behalf of investors who sold Twitter shares between May 13 and October 4, 2022, while Musk publicly cast doubt on whether he would complete the $44 billion acquisition he had agreed to pursue.

The pivotal tweet, posted May 13, 2022, declared the Twitter deal was "temporarily on hold" while Musk sought data on the number of fake and spam accounts on the platform. Jurors found that tweet and a second May 2022 post were false and responsible for a steep drop in Twitter's share price during that period. The jury calculated that Musk's statements artificially lowered the stock by roughly $3 to $8 per share across that five-month window.

The verdict was not a total repudiation. Jurors stopped short of finding that Musk had orchestrated a broader "scheme to defraud" investors, and they determined that a separate statement he made on a podcast that month did not constitute a false claim because it was an opinion. The liability finding rested squarely on the two tweets.

Brian Belgrave, a small-business owner from Oregon who served as a lead plaintiff and testified at trial, described selling thousands of Twitter shares in July 2022 after concluding from Musk's posts that the deal was dead. He sold at a price far below what he had paid and far below the $54.20 per share Musk ultimately paid when he closed the acquisition in late October 2022. "I got screwed," Belgrave testified. "I got cheated."

Musk, who spent more than a day on the stand and was described as combative with plaintiffs' lawyers, argued throughout trial that he had not misled anyone and that investors simply read too much into his public comments. Former Twitter executives Parag Agrawal and Ned Segal also testified during the proceedings.

Plaintiffs' attorneys estimated aggregate damages at approximately $2.6 billion, broken down as roughly $2.1 billion in stock losses and $500 million tied to options. The precise amounts owed to individual class members will be determined after affected shareholders submit claims to the court.

Musk's lawyers called the verdict a "setback" and said they intend to appeal. The outcome adds to an already complicated legal landscape for the world's wealthiest person: Musk is currently in talks to settle a separate Securities and Exchange Commission lawsuit accusing him of waiting too long to disclose his initial Twitter stock purchases in 2022. He prevailed in a 2023 securities case brought by Tesla shareholders over tweets, but this verdict marks the first time a jury has found his social media posts caused compensable investor harm.

Musk completed the Twitter acquisition in late October 2022 and subsequently renamed the platform X. The final damages in this case will hinge on how many eligible shareholders file claims, a number that will determine whether plaintiffs' $2.6 billion estimate holds.