Jury Finds Elon Musk Made Misleading Statements in Twitter Deal Case

• The jury finds Musk’s tweets misleading, impacting Twitter stock and investor decisions.
• Court rejects fraud scheme claim despite acknowledging shareholder harm.
• Claims process may take months before investors begin recovering losses.

A California jury has ruled that Elon Musk made materially false and misleading statements during the lead-up to his $44 billion acquisition of Twitter, concluding a lawsuit tied to the 2022 takeover.

While the jury found that Musk’s public remarks affected shareholders and contributed to financial losses, it stopped short of concluding that he engaged in a deliberate scheme to defraud investors.

Misleading Statements Linked to Share Price Decline

The case, Pampena v. Musk, was filed shortly after Musk completed the Twitter acquisition at $54.20 per share in October 2022. Central to the lawsuit were Musk’s public comments in May 2022, particularly his statements questioning the accuracy of Twitter’s reported bot and spam account figures.

Jurors concluded that Musk’s posts on May 13 and May 17 were misleading and had a direct impact on market behavior. Following those statements, Twitter’s share price dropped nearly 10% in a single trading session. Plaintiffs argued that these remarks influenced investor decisions, leading some shareholders to sell their holdings below the agreed acquisition price.

The lawsuit addressed a class of former Twitter shareholders, including retail investors and options traders, who claimed they suffered financial losses due to Musk’s shifting stance on the deal.

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Jury Rejects Allegations of Coordinated Fraud Scheme

Despite acknowledging that certain statements were misleading, the jury did not find sufficient evidence to support claims that Musk orchestrated a broader scheme to intentionally depress Twitter’s stock price. Plaintiffs had argued that Musk’s actions were aimed at renegotiating the acquisition at a lower valuation, potentially influenced by declines in Tesla’s share price, which played a role in financing the deal.

Musk’s legal team argued that his concerns regarding bots and fake accounts were legitimate and grounded in available information. In a statement following the verdict, his attorneys described the outcome as mixed, noting that the jury found no coordinated fraud scheme and expressing confidence in a future appeal.

Attorneys warned that it may take approximately 90 days to establish a claims administration process. Following that, additional time will be required for government processing before eligible investors can begin recovering losses.

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