A San Francisco federal court jury found that Elon Musk intentionally misled Twitter shareholders while trying to lower the price of a deal to purchase the platform in 2022.
Points of attention
- Elon Musk was found guilty by a San Francisco federal court jury for intentionally misleading Twitter shareholders to drive down stock prices.
- The court ruled in favor of two fraud charges against Musk related to his tweets about the Twitter deal, dismissing the other two charges.
- Shareholders may seek a total compensation of $2.6 billion from Musk, although his fortune of $661.1 billion may not be significantly impacted.
He played with tweets: the court found Musk guilty
The eight-member jury concluded that Musk's tweets, including a May 13, 2022, post about "temporarily suspending" the deal due to allegedly too many fake accounts, were part of a deliberate plan to drive down Twitter's stock price in order to renegotiate the terms of the purchase.
The jury rejected two of the four fraud charges. They upheld two more.
The exact amount of damages will be determined later, when shareholders file individual lawsuits. Investors' lawyer Mark Molamfi believes the total compensation could be $2.6 billion.
However, even this amount is unlikely to significantly affect Musk's fortune: on Friday, March 20, his capital was $661.1 billion.
Musk initially proposed the $44 billion deal himself. Then he began to publicly doubt it: he wrote about bots, fake accounts, and questioned the company's data.
Twitter shares fell to $32.52 in those months, a 40% drop from the buyout price. When Twitter sued, Musk eventually agreed to the original price of $54.20 per share.
At trial, he explained it this way: he believed the judge in Delaware was biased against him.
He claimed that former Twitter executives lied to him and in public reports about the number of bots on the platform.
"Maybe it's not the wisest tweet I've ever made. I don't know if I'd call it the stupidest. But if it led to this lawsuit, then it probably qualifies as such," Musk commented on his scandalous tweet about the "suspension" of the deal.
At the same time, he said that he never announced the suspension of the agreement.
"This case is much bigger than Twitter, it's about Wall Street and what's been happening in recent years. It's a great example of what you can't do to the average investor," said Joseph Cotchett, a lawyer for the investors.
Musk's team is going to appeal.
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