Elon Musk arrives at federal court on March 4, 2026 in San Francisco, California.
Josh Edelson | Getty Images
A jury in California found that Elon Musk misled Twitter shareholders during the runup to his $44 billion acquisition of the social media company, according to a verdict issued on Friday.
Total damages could reach up to $2.6 billion, the attorneys for the plaintiffs said.
The class action lawsuit, Pampena v. Musk, was originally filed in October 2022, after Musk completed his purchase of Twitter for $54.20 per share. He later renamed the company X, before merging it with his artificial intelligence company xAI, and then with SpaceX, his reusable rocket manufacturer.
“This is a great example of what you cannot do to the average investor — people that have 401ks, kids, pension funds, teachers, firemen, nurses,” Joseph Cotchett, an attorney for the Twitter investors, told CNBC at the San Francisco courthouse. “That’s what this case was all about. This was not about Musk. It was about the whole operation.”
Attorneys for Musk declined to comment.
After Musk bid to buy Twitter in April 2022, his sentiment towards the deal quickly soured as he cast doubt on the company’s claimed level of bots, spam and fake accounts on its platform. Musk wrote in a tweet the following month that his acquisition was “temporarily on hold” until Twitter’s CEO could prove its inauthentic account levels were around the 5% reported in the company’s SEC filings.
Musk’s tweets and additional comments sent shares of Twitter sliding by almost 10% in a single session.
Former Twitter shareholders, including retail investors and options traders, argued that Musk’s flip-flopping amounted to a scheme to pressure the company’s board to sell to him for a lower price than his original offer. They claimed he was motivated by stock price declines at Tesla, which would require him to sell even more shares in the automaker than he’d intended in order to finance the buyout.
The plaintiffs in the class action suit said that they sold shares below $54.20 following and in response to Musk’s posts and comments during press interviews.
Musk’s attorneys argued their client’s remarks were based on well-founded concerns about bots, spam and fake accounts on Twitter, and did not amount to securities fraud or a scheme to depress the company’s stock price.
While the verdict marks a stinging rebuke for Musk, the financial implications are minimal considering his net worth, which currently sits at about $650 billion, according to Bloomberg.
This is a developing story please check back for updates.
WATCH: Why Tesla is pivoting
