Elon Musk Found Liable in Twitter Bot Claims, Damages to Be Decided

A San Francisco federal court jury has found Elon Musk liable for misleading investors regarding the number of bot accounts on Twitter (now X) prior to his acquisition of the company in October 2022. The verdict, reached after a closely watched trial, centers on claims that Musk falsely asserted Twitter underreported the prevalence of fake and spam accounts, commonly known as bots, on its platform.

The Case Against Musk

Shareholders alleged that Musk publicly questioned the accuracy of Twitter’s reported bot figures on three separate occasions after agreeing to purchase the company in April 2022. Specifically, they pointed to a May 17, 2022, tweet where Musk stated his takeover “cannot go forward” until Twitter’s CEO demonstrated the bot percentage was below 5%. Investors argued that these statements artificially depressed the stock price between May 13 and October 4, 2022, as they sold their shares at a loss.

During closing arguments, shareholders’ lawyer Mark Molumphy contended that Musk “trashed the company, trashed the executives and tanked the stock.”

Musk’s Defense

Musk’s legal team, led by Michael Lifrak, maintained that the billionaire’s concerns about bots were genuine and that raising the issue did not constitute fraud or an intent to mislead investors. They argued that Musk was legitimately investigating the problem and expressing his concerns.

Previous Legal Battles

This verdict follows a pattern of Musk facing shareholders in court, rather than settling. He previously won trials in San Francisco regarding claims he defrauded Tesla shareholders with false statements about securing funding to take the company private in 2018, and in Delaware concerning his $139 billion Tesla pay package.

X Corp. And Recent Developments

Musk completed the acquisition of Twitter in October 2022 and subsequently rebranded the platform as X in July 2023 [1]. The domain name officially changed from twitter.com to x.com on May 17, 2024 [4]. X is now closely integrated with Musk’s other ventures, including SpaceX, and features new functionalities such as long-form texts, account monetization, audio-video calls, and integration with xAI’s Grok chatbot [1].

Linda Yaccarino succeeded Musk as CEO of X in June 2023, but resigned on July 9, 2025 [5].

Damages and SEC Investigation

The jury’s decision does not immediately determine the amount of damages Musk will be required to pay. This will be determined in a subsequent phase of the proceedings. Musk is similarly currently involved in settlement talks with the U.S. Securities and Exchange Commission (SEC) regarding accusations of delaying disclosure of his initial Twitter stock purchases in 2022.