A civil jury in California on Friday ruled that Elon Musk intentionally misled Twitter investors when he tried to back out of his $44 billion acquisition of the platform in 2022.
At the time, Musk had tweeted that Twitter had too many bots, which is why he later tried to renege on the acquisition. (Twitter ended up suing Musk to force him to seal the deal.)
"Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users," Musk wrote on the platform that he has since renamed X.
In the days after Musk posted this, Twitter shares declined 8%. Investor Giuseppe Pampena filed suit against Musk on behalf of other former Twitter investors who had sold Twitter shares between May 13 (the day of the tweet) and October 4, the day the deal was finalized.
Pampena's lawsuit argued that Musk intentionally posted about his concerns with Twitter to create uncertainty about the platform's stability to artificially drive down its stock price, causing those who sold shares during that window to suffer losses. Musk's attorneys argued that he was expressing legitimate concerns about the number of bots on the app. But the jury was more convinced by the plaintiff's argument.
It is not yet clear how much money Musk will have to pay to those former Twitter shareholders, but Pampena's attorney said that damages could reach up to $2.6 billion, according to CNBC. It's not a huge blow for Musk, as Bloomberg estimates his net worth at over $660 billion.
This isn't Musk's first experience going to court over tweets. In 2018, he tweeted that he had secured funding to take Tesla private at $420 per share, meaning he planned to buy out public shareholders and delist the company from stock exchanges. The SEC alleged that these posts were misleading, charging Musk with securities fraud. Musk later had to testify in court that he was not making a marijuana joke (420 being a widely recognized slang reference to cannabis) and maintained that he earnestly believed that he would take Tesla private at $420 per share, which was a substantial premium on Tesla's stock price at that time.
Musk emerged victorious in a similar lawsuit that shareholders filed about the "funding secured" tweet, but this time, he'll have to pay up.
After acquiring Twitter, Musk rebranded the company as X, then merged it with his newer AI company, xAI. The combined company was valued at $113 billion, according to Musk. Then, last month, SpaceX merged with xAI. Musk has said that the merger was motivated by his desire to build data centers in space.
