Elon Musk misled investors during Twitter takeover, US jury finds
US Jury Rules Elon Musk Intentionally Lowered Twitter Share Price Before Takeover
A U.S. jury has determined that Elon Musk intentionally reduced Twitter’s stock price in the months prior to his $44 billion acquisition of the social media platform.
The legal battle focused on a class-action suit initiated shortly before Musk assumed leadership of Twitter, now rebranded as X. Jurors were tasked with evaluating whether two tweets and remarks from a podcast in May 2022 constituted deliberate deception, influencing shareholders to sell their holdings based on his statements.
Controversy Over Bot Accounts
A key element of the trial revolved around Musk’s assertion that Twitter had misrepresented the number of bot accounts on its network. He cited the platform’s underreporting of fake and spam accounts as a reason to withdraw from the deal.
“He trashed the company. Trashed the executives. And tanked the stock,” the shareholders’ lawyer, Mark Molumphy, said during his closing argument on Tuesday.
Musk’s legal team contended that his concerns about bots were genuine, and that expressing these worries did not equate to fraudulent intent.
The court was shown a tweet in May 2022 where the tycoon stated his takeover “cannot go forward” until Twitter’s chief executive proved the bot percentage was less than 5%. After he tried to withdraw, Twitter pursued legal measures to compel him to fulfill the original agreement.
Musk ultimately settled on the original terms, finalizing the acquisition of Twitter in October 2022. His net worth, currently around $814 billion, is significantly invested in Tesla stock.
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The billionaire is separately in talks to settle a U.S. Securities and Exchange Commission civil lawsuit, which accuses him of delaying disclosure of his initial Twitter purchases to buy more shares at low prices before investors saw his actions.
