Elon Musk Found Liable for Misleading Twitter Investors Ahead of $44 Billion Acquisition
A California jury has largely sided with Twitter shareholders who accused Elon Musk of making false statements and intentionally driving down the social media company’s stock price before his $44 billion acquisition in 2022. While the jury did not identify Musk guilty of engaging in a deliberate scheme to defraud investors, they determined he misled investors with his public statements.
Jury Verdict and Potential Damages
The verdict, reached on Friday, March 20, 2026, resolves a civil class action lawsuit filed by Twitter shareholders in October 2022, shortly before Musk finalized the acquisition CNN. The potential damages are estimated to be around $2.5 billion, dependent on the number of shareholders who file claims CNN. Jurors calculated damages between $3 and $8 per stock, per day.
The Core of the Lawsuit: Tweets About Fake Accounts
The lawsuit centered on Musk’s tweets and public statements regarding the number of fake accounts and bots on the Twitter platform. Shareholders alleged that Musk deliberately attempted to depress Twitter’s stock price after initially agreeing to purchase the company for $54.20 per share, hoping to renegotiate or withdraw from the deal PBS. Specifically, a May 13, 2022, tweet stating the deal was “temporarily on hold” due to concerns about bots, and subsequent statements suggesting fake accounts could comprise over 20% of users, led to a significant drop in Twitter’s stock price CNBC.
Musk’s Defense and Shareholder Testimony
During the trial, Musk maintained that his tweets were simply him “speaking his mind” and that Twitter executives had previously provided inaccurate information about the prevalence of bots on the platform PBS. However, shareholders testified that they sold their stock at a loss due to Musk’s fluctuating statements and uncertainty surrounding the acquisition CNBC.
Broader Legal Battles Surrounding the Acquisition
This lawsuit is one of several legal challenges Musk faced during and after the Twitter acquisition. Other cases included shareholder lawsuits related to the delayed disclosure of his initial stake in the company, and a suit from former Twitter executives concerning unpaid severance benefits Wikipedia. Musk also previously attempted to back out of the deal altogether, though he ultimately completed the purchase in October 2022 Wikipedia.
Looking Ahead
Musk’s legal team intends to appeal the verdict CNBC. The outcome of this case could have implications for future high-profile acquisitions and the responsibilities of corporate leaders regarding public statements that may impact stock prices.