Elon Musk misled Twitter investors, jury finds

 

Elon Musk misled Twitter investors, jury finds (Image: Reuters)

A jury has determined that Elon Musk made false statements in public during a crucial phase of his 2022 Twitter takeover. The tech tycoon was sued by a group of Twitter investors on the grounds that they had relied on his statements. After two days of deliberation, a jury in San Francisco's federal court returned a unanimous verdict in his favor. Musk argued in court earlier this month that investors were not misled and that people simply overestimated his tweets and public statements. The jury instead found that certain of his public claims of problems in Twitter's user metrics, and that he was possibly backing out of the $44bn acquisition deal, were intentionally misleading.

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A request for clarification was not received from Musk's lawyers. Lawyers for the investors, led by Oregon-based small business owner Brian Belgrave, also did not. This isn't the first time Musk has been in trouble with the law because of his tweets. However, he was able to avoid being sued in 2023 by Tesla shareholders who claimed that the CEO had misled them through posts about the automaker. In its verdict on Friday, the San Francisco jury found that Musk's public statements had caused him to artificially lower Twitter's stock price by between $8 and $3 per share between May and October 2022. This could indicate that each class investor stands a chance of receiving thousands of dollars in compensation for their losses. The verdict against Musk "sends a clear message," according to Armstrong Teasdale trial attorney Monte Mann, who specializes in business litigation. "If you move the market with your words, you own the consequences."

 Musk began around May 2022 to tweet about Twitter's purported issues with fake accounts, or "bots," and said the deal was "on hold" before announcing he wanted out of the deal entirely.

 

Twitter took Musk to court in order to force the multi-billionaire to abide by the deal, and in early October Musk did so, taking over Twitter at the originally agreed upon price.  He rebranded the social media platform as X the following year. Investors in Twitter, like Belgrave, who bought and sold shares of the company during those months proved to be financially detrimental. Belgrave told the jury earlier this month that in July 2022, he sold thousands of shares of Twitter because he thought Musk wouldn't buy the platform anymore because of his public posts and comments. In comparison to the price he had paid for the shares a few months earlier, Belgrave's sale price was significantly less than Musk's final payment of $54.20 per share. Belgrave declared, "I got screwed." "I was duped." During Musk's testimony to the jury, he became more acrimonious with the investors' lawyers. He eventually refused to answer questions with a simple "yes" or "no", arguing multiple times that the lawyers were trying to mislead the jury.

 Musk conceded at one point, "If this were a trial on whether I've made stupid tweets, I'd say I'm guilty."

Source: BBC