SAN FRANCISCO (AP) — A federal jury in San Francisco found Elon Musk liable for defrauding investors in Twitter, now known as X, by deliberately driving down the company’s stock price in the months leading up to his $44 billion acquisition, a verdict reached Friday after a multi-week civil trial.
The jury sided with shareholders who alleged Musk misled them with statements on social media questioning the number of bot and spam accounts on the platform. Specifically, the lawsuit focused on two tweets posted in May 2022, where Musk suggested the actual number of bot accounts was significantly higher than Twitter’s reported 5%, potentially reaching as high as 20%.
Investors, led by plaintiff Giuseppe Pampana, argued that these statements were intended to create doubt about the deal and ultimately lower the purchase price. They claimed Musk’s actions violated securities regulations designed to prevent false and misleading statements that artificially depress stock values. The class action lawsuit represented shareholders who sold Twitter stock between May 13, 2022 and October 4, 2022.
Musk’s legal team, from Quinn Emanuel, countered that his concerns about bot accounts were genuine and that publicly raising the issue was not an attempt to manipulate the market. They maintained that Musk was acting in good faith to assess the true value of the company before completing the acquisition. “We view today’s verdict, where the jury found both for and against the plaintiffs and found no fraud scheme, as a bump in the road. And we glance forward to vindication on appeal,” Musk’s attorneys said in a statement.
The trial, which began March 4, 2026, featured testimony and evidence related to Musk’s communications and motivations during the tumultuous period surrounding the acquisition. Musk initially attempted to withdraw from the deal, citing concerns about the number of bot accounts, but was later compelled to complete the purchase after Twitter sued to enforce the original agreement.
Following the completion of the acquisition in October 2022, Musk rebranded Twitter as X and subsequently merged it with his artificial intelligence company, xAI, and his aerospace manufacturer, SpaceX.
Although the jury found Musk liable for misleading investors, the determination of damages remains a separate process. Attorneys for the plaintiffs indicated that potential damages could reach up to $2.6 billion, according to CNBC. A hearing to determine the amount of damages will be scheduled at a later date. Neither Musk’s legal team nor representatives for the shareholders have publicly commented on the verdict beyond the initial statement from Musk’s attorneys.
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