Elon Musk Found Liable for Defrauding Twitter Shareholders
A U.S. Federal jury has found Elon Musk liable for defrauding Twitter shareholders by attempting to drive down the social media company’s stock price before his $44 billion acquisition in 2022. The verdict, reached on Friday, March 20, 2026, could result in damages reaching up to $2.5 billion for the injured investors [Reuters].
Musk’s Statements and the Stock Price
The lawsuit centered on public statements made by Musk in the spring of 2022, during which he questioned the number of bot and fake accounts on the platform. He publicly stated that he would not proceed with the acquisition unless the percentage of bots was below 5% [DW]. These statements were alleged to be a tactic to lower the stock’s value, allowing Musk to renegotiate a lower purchase price or potentially withdraw from the deal altogether.
Legal Battles and the Acquisition
Despite the original contract not permitting him to back out, Musk attempted to terminate the agreement. Twitter then filed a lawsuit in Delaware to compel him to honor the original terms [DW]. Musk reversed course and completed the acquisition in October 2022 for the originally agreed-upon price, subsequently renaming the platform X.
Impact on Investors
Musk’s uncertainty surrounding the deal had an immediate negative impact on Twitter’s stock price, which fell by as much as $8 per share, according to experts who testified in court [NewsBreak]. Investors who sold their shares during this period, fearing the deal would collapse, are now eligible for compensation.
Musk’s Response
Elon Musk maintains his innocence, claiming he did not influence investors and that his public statements should not be given undue weight. He acknowledged making “stupid tweets” but denied intentionally misleading anyone [Reuters].
Jury’s Findings
Whereas the jury found Musk liable for misleading shareholders, it did not conclude that he actively “schemed” to defraud investors [DW]. The case focused on his claims regarding the number of bots on the platform.