A jury in a San Francisco court concluded today that Elon Musk intentionally misled investors in an attempt to drive down the price of Twitter Inc. ahead of his purchase of the company. Here are the details.
Musk on the hook for billions of dollars
As reported by Bloomberg:
Jurors in federal court in San Francisco found Friday that Musk intentionally misled Twitter shareholders when he tweeted that the social network — now called X — had too many fake accounts and tried to back out of the deal. The jury rejected two of the four fraud claims.
In 2022, Elon Musk made an unsolicited offer to buy Twitter for $54.20 per share, which valued the company at approximately $44 billion. At the time, Twitter Inc.’s market cap was about $36 billion.
In the weeks and months that followed, Musk tried to back out of the deal multiple times, alleging that Twitter had significantly underreported the number of bots on the platform. He ultimately completed the acquisition after Twitter sued to enforce the agreement.
After all was said and done, Musk was sued once again, this time accused of defrauding investors by publicly disparaging the company in an attempt to drive its stock price down. As Bloomberg noted, “in July 2022, the shares reached a low of $32.52, 40% less than Musk’s buyout price.”
Today, a jury sided with the plaintiffs, potentially putting Musk on the hook for what the lawyer for the investors estimates could reach $2.6 billion.
The eight-member panel calculated how much Musk’s statements drove down the company’s stock price for each trading day over a period of about five months. The amount of damages he must pay to individual investors — which could total hundreds of millions or even billions of dollars — will be determined at a later date when shareholders submit claims.
Musk didn’t respond to Bloomberg’s request for comment, but it is reasonable to expect that he will appeal the decision.
Update, 7:56 p.m. ET: According to the WSJ, Musk’s lawyers have confirmed he will appeal.
To read Bloomberg‘s full report of today’s decision, follow this link.
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