Elon Musk could be facing a huge payout after a jury found him liable for misleading Twitter investors ahead of his takeover of the platform, which he bought from Jack Dorsey.
Musk’s 2022 purchase of Twitter cost him a reported $44 billion. Even so, the SpaceX boss is among the world’s richest people and, as of March 21, Forbes estimates his net worth at more than $814 billion.
In the run-up to the acquisition, Musk posted online and spoke on a podcast in ways that suggested he might walk away from the deal. Those remarks reportedly prompted some shareholders to sell their Twitter stock.
According to the claims in the case, Musk then increased his own buying after the price dropped, picking up shares at a lower cost once others had sold.
The 54-year-old was later hit with a civil class action lawsuit accusing him of intentionally depressing Twitter’s stock price and misleading investors.
The case went to trial in San Francisco, California, where jurors ultimately found Musk liable.
However, the jury did not accept every allegation. While it concluded he misled investors, it also determined he did not carry out an intentional plan to deceive them.
Jurors were tasked with deciding whether two tweets and comments made during a May 2022 podcast amounted to deliberate fraud against Twitter shareholders who sold after hearing Musk’s statements.
After three days of deliberations—nearly three weeks after proceedings began on March 2—the nine-person jury reached its verdict.
The jurors said Musk was responsible for misleading investors through two tweets, including one stating the deal was ‘temporarily on hold’. But they found he was not liable based on the podcast remarks, and they rejected the idea that he intentionally ‘scheme’ to defraud shareholders.
Because the case is a class action, the final figure Musk may owe is still unclear, as it would apply to thousands of shareholders, including many institutional investors. Even so, the total could reach into the billions.
The jury awarded shareholders compensation of roughly three to eight dollars per share per day.
Some estimates have put potential damages as high as $2.6 billion.
“It’s an important victory, not just for investors of Twitter, but for the public markets,” said Joseph Cotchett, a lawyer for the plaintiffs.
“I think 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.”
Musk’s legal team is reportedly preparing to challenge the outcome.
They said statement via email following yesterday’s decision (per CNBC): “We view today’s verdict, where the jury found both for and against the plaintiffs and found no fraud scheme, as a bump in the road. And we look forward to vindication on appeal.”