Elon Musk was found liable for damages by a San Francisco jury for intentionally lowering the stock price during a critical window before his acquisition of Twitter in 2022.
On Friday, March 20, a jury in the U.S. federal court in San Francisco ruled that Musk defamed Twitter in 2022, attempting to acquire the social media platform at a price below his initial $44 billion offer, which constituted fraud against Twitter investors.
The jury ruled that Tesla must pay shareholders approximately $3 to $8 per share in damages, with the final amount to be determined at a later date after shareholders submit their claims. Plaintiff's lawyers stated that the total damages amount to about $2.1 billion. It was later reported that Musk plans to appeal the verdict.
In May 2022, Musk tweeted twice, claiming that the social network had too many fake accounts and attempted to back out of the deal. The tweets caused Twitter's stock price to plummet, and during the entire period the deal was pending, Twitter's stock price fell below $33 at one point, about 40% lower than Musk's initial offer.
<h2>Case Focus: Two Tweets and Market Turmoil</h2>
In April 2022, Musk announced his acquisition of Twitter at $54.20 per share, totaling $44 billion.
However, in the following months, Musk's stance shifted dramatically, repeatedly expressing intentions to withdraw from the deal citing issues with fake accounts, ultimately attempting to unilaterally terminate the agreement.
Twitter subsequently filed a lawsuit in Delaware court, demanding that Musk fulfill his original commitment. Just before the trial was set to begin, Musk reversed course again, agreeing to complete the transaction at the original price.
The plaintiffs argued that Musk's wavering was genuinely motivated by Tesla's declining stock price, which meant he needed to sell more Tesla shares to finance the acquisition, thus seeking to lower Twitter's valuation or exit the deal.
On May 13, 2022, Musk tweeted that the acquisition of Twitter was &#34;on hold&#34; temporarily, citing the need for further information regarding the proportion of fake accounts on the Twitter platform.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/7afff672-7106-433b-886c-51dce1bfef1e.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/7afff672-7106-433b-886c-51dce1bfef1e.png"/>
Another tweet posted on May 17 responded to a report from Teslarati, emphasizing that the number of fake accounts could be far higher than the &#34;less than 5%&#34; claimed by Twitter, stating that the deal could not proceed until proof was provided.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/6c0fa778-ef38-4715-8d8b-6fbce130085a.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/6c0fa778-ef38-4715-8d8b-6fbce130085a.png"/>
The aforementioned tweets led to a sharp decline in Twitter's stock price, and during the entire period the deal was pending, Twitter's stock price fell below $33 at one point, about 40% lower than Musk's initial offer. The plaintiffs believe that investors who were forced to sell their stocks during this period suffered substantial losses.
Plaintiff's attorney Mark Molumphy pointed out in his closing arguments that the relevant tweets were not &#34;innocent mistakes&#34; or &#34;impulsive words,&#34; but were carefully calculated, aimed at lowering Twitter's stock price in order to renegotiate the acquisition terms or completely withdraw from the deal
A committee of eight members calculated the decline in the company's stock price caused by Musk's statements over approximately five months, on each trading day. The compensation amount he may have to pay to individual investors could reach hundreds of millions or even billions of dollars, which will be determined on a date to be set after shareholders submit claims.
<h2>Musk's Defense: Concerns About Robot Accounts and Misinformation</h2>
The core defense position of Musk's side is that his statements stemmed from genuine concerns about the scale of robot accounts on the Twitter platform and do not constitute securities fraud or a deliberate attempt to suppress the stock price.
According to reports, Musk testified for over a day, insisting that Twitter's management concealed information regarding the number of fake accounts, repeatedly using a vulgar term to describe the credibility of the information provided by Twitter's board.
When Musk discussed Twitter's claim that only about 5% of accounts are bots, he stated:
<blockquote>
I clearly said, I think that's nonsense.
</blockquote>
Musk also argued that completing the acquisition at the originally agreed price actually provided substantial returns to the vast majority of Twitter shareholders. He said:
<blockquote>
I can't control whether others sell their stock, but those who held on to their shares benefited greatly.
</blockquote>
During the contentious trial, Musk's lawyers repeatedly filed motions to declare the trial invalid, claiming that due to public hostility towards the billionaire Tesla CEO, he could not receive a fair trial in San Francisco

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In 2022, before Elon Musk acquired Twitter, he posted two tweets suggesting he might withdraw from the deal due to issues with fake accounts, causing Twitter's stock price to plummet nearly 40%. A federal jury in San Francisco ruled that this constituted fraud against Twitter investors and ordered Tesla to compensate the affected shareholders, with plaintiff lawyers estimating the total amount to be around $2.1 billion

- A San Francisco jury has ruled that Elon Musk deliberately deflated Twitter's stock price before his 2022 acquisition attempt, ordering him to pay damages to shareholders.  
- The jury found Musk's claims about fake accounts, made through tweets, were fraudulent actions that led Twitter's stock to plummet, causing substantial losses for investors.  
- Musk plans to appeal the decision, maintaining that his statements arose from genuine concerns about fake accounts rather than an intent to manipulate the market.

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After being ruled to have misled Twitter investors before the 2022 acquisition, Musk is to pay over $2 billion