A courtroom sketch depicts Elon Musk on the stand on Mar. 4, 2026. A federal jury in San Francisco found Elon Musk liable for attempting to drive down Twitter’s stock price with misleading statements ahead of his 2022 acquisition of the company. (Vicki Behringer for KQED)
By Katie DeBenedetti
For KQED
Elon Musk has been found liable for attempting to drive down Twitter’s stock price ahead of his $44 billion takeover of the company four years ago, a federal jury in San Francisco decided Friday.
Attorneys said the world’s wealthiest person will owe an estimated $2.1 billion in damages to former shareholders in the company, who say they lost out on earnings when they sold their stocks at deflated prices amid Musk’s public waffling over his 2022 acquisition deal.
“The jury’s verdict sends a strong message that just because you’re a rich and powerful person, you still have to obey the law and no man is above the law,” attorney Mark Molumphy, who represented the shareholders, said after the verdict was read Friday.
Attorneys for Musk declined to comment on the verdict.
Elon Musk Takes Over Twitter: NAJ screen shot
The class action lawsuit accused Musk of making misleading statements to hurt Twitter’s stock price with the intent to renegotiate a cheaper price in the months it took to close the deal.
The weekslong civil trial focused primarily on statements he made in May 2022, a month after signing the binding purchase agreement, speculating that the number of bots on Twitter was much higher than the company publicly reported and suggesting that the deal could be put on pause as a result.
Elon Musk speaks at the Conservative Political Action Conference (CPAC) at the National Harbor in Oxon Hill, Maryland, on Feb. 20, 2025. (Valerie Plesch/The Washington Post via Getty Images)
In Securities and Exchange Commission filings at the time, Twitter reported that spam accounts made up about 5% of its daily users.
Testifying earlier this month, Musk said that in early May 2022, he asked then-CEO Parag Agrawal and CFO Ned Segal how the company determined that percentage, and did not get a clear answer.
Days later, he tweeted that the deal was “temporarily on hold” pending that information.
Hours after that, he posted that he was “still committed to the acquisition,” but the following Monday, he tweeted again, suggesting that up to 20% of Twitter users could be bots. In the time between those posts, the company’s stock dropped nearly 18%.
On the stand, Musk said he was only speaking his mind with his tweets and had not intended to manipulate the market. He also maintained his belief that the company had misrepresented the number of bots, saying at times he felt like up to 90% of comments on his posts were from spam accounts.
He deflected blame for investors’ lost earnings, saying that “if somebody had simply held on to their position … the vast number of people benefited greatly from the acquisition.”
Ultimately, the deal closed at its original price point in October 2022, after Twitter sued Musk, accusing him of trying to back out of the deal.
Molumphy told reporters on Friday that the verdict was a victory not only for shareholders but also for Twitter as a company.
“He was basically saying the company was a sham,” he said. Before Musk’s takeover, he said, “Twitter was an important institution in San Francisco. It was not a sham; it was a real company, and the way he dragged it through the mud in order to basically get a better deal was atrocious.”
Attorneys believed the ruling was the first time a jury had held Musk liable for his statements on Twitter.
“Going forward, this will have a real chilling effect,” said Monte Mann, a Chicago-based business litigation partner. “Executives and dealmakers will need to think carefully about how public statements can be interpreted — not just as disclosure, but as part of the negotiation itself.”
The maximum cost to Musk could be closer to $2.6 billion, accounting for both shares and stock options, the plaintiffs’ lawyers estimated. They said that it will likely take about six months for class members to receive damages.
“But it’ll be well earned,” attorney Joseph Cotchett said.
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