Jury Finds Elon Musk Liable for Manipulating Twitter Stock Price Prior to Acquisition

A federal jury in San Francisco has found Elon Musk liable for attempting to drive down Twitter’s stock price by making misleading statements ahead of his 2022 acquisition of the social media platform. The verdict concludes a civil trial focused on whether Musk manipulated the market to secure a better purchase price for the company.

The Core of the Lawsuit

The class action lawsuit accused the tech billionaire of intentionally creating uncertainty regarding the prevalence of bot accounts on the platform. Prosecutors argued that Musk made public statements speculating that spam accounts constituted a much higher percentage of users than the company reported, aiming to create leverage for renegotiating the $44 billion deal.

According to reports, the trial focused heavily on statements made in May 2022. Following the signing of the binding purchase agreement, Musk tweeted that the deal was on hold and later suggested bot counts could be as high as 20%. In the hours and days following these posts, Twitter’s stock price dropped nearly 18%. The jury found that these actions constituted an attempt to manipulate stock value.

Testimony and Defense

During his testimony, Musk defended his statements, claiming he was merely expressing his opinions and observations regarding spam accounts. He maintained that he believed the company had misrepresented its user data and denied any intent to manipulate the market. However, the jury rejected this defense, siding with the shareholders who claimed financial losses due to his public conduct.

Implications and Damages

Legal experts suggest this ruling is a landmark decision regarding executive conduct on social media. Monte Mann, a business litigation partner, noted that the verdict may have a "chilling effect," forcing executives to consider how their public statements might be interpreted as negotiation tactics rather than mere disclosure.

Plaintiffs' lawyers estimate that the maximum cost to Musk could reach $2.6 billion, accounting for both shares and stock options. Attorney Joseph Cotchett stated that while it may take months for class members to receive damages, the compensation would be "well earned." The legal team for the plaintiffs described the verdict as a victory not only for shareholders but for the integrity of the company itself.