Elon Musk misled investors during Twitter takeover, US jury finds
Elon Musk Misled Investors During Twitter Takeover, US Jury Finds
A U.S. jury has ruled that Elon Musk intentionally misled investors by manipulating Twitter’s share price in the months before his $44 billion acquisition of the social media company. The verdict stems from a civil trial in San Francisco, where Musk’s actions were scrutinized for their impact on shareholders.
Musk, the world’s wealthiest individual, was acquitted of some fraud charges in the case. The lawsuit, filed shortly before he took control of Twitter and renamed it X, hinged on two tweets and podcast comments he made in May 2022. These statements were claimed to have influenced investors to sell their shares, leading to a significant drop in the stock’s value.
“He trashed the company. Trashed the executives. And tanked the stock,” said Mark Molumphy, the shareholders’ lawyer, during his closing argument. This highlights the claim that Musk’s rhetoric directly harmed the company’s market position.
Musk’s legal team argued that his focus on bots was genuine, emphasizing that expressing concerns about the platform’s fake accounts did not equate to fraudulent intent. The trial also revealed that Musk cited Twitter’s misrepresentation of bot numbers as a reason to withdraw from the deal initially.
Though the exact damages remain unspecified, the court estimates the amount could reach billions of dollars. This would affect thousands of shareholders, including institutional investors, who relied on Musk’s statements when making decisions. Musk’s fortune, currently valued at around $814 billion, is heavily tied to Tesla shares, which were a key asset in the takeover.
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Following Musk’s attempt to back out of the deal, Twitter pursued legal action to enforce the original agreement. Eventually, Musk agreed to honor his commitment and finalized the purchase in October 2022. He is separately engaged in talks to resolve a U.S. Securities and Exchange Commission case, which accuses him of delaying the disclosure of his initial stock purchases to exploit market conditions.
