A Californian jury has found that Elon Musk misled investors before his $44 billion takeover of Twitter in 2022, as reported by the BBC. Musk had testified he did not believe his tweets were misleading, but conceded, “If this was a trial about whether I made stupid tweets, I would say I’m guilty.” Sometimes the headlines write themselves.
The jury found that, while Musk did not deliberately set out to defraud shareholders, two of his tweets from 2022 were materially false or misleading, and caused some investors to sell shares at below the eventual $54.20 per share that Musk paid for the social media company. The tweets in question are from May 13th and May 27th, 2022, and read as follows:
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My offer was based on Twitter’s SEC filings being accurate.
Yesterday, Twitter’s CEO publicly refused to show proof of <5%.
“Elon Musk cheated investors to save himself billions of dollars,” said Aaron Arnzen, representing the investors, adding that Musk wanted to “trash Twitter with his personal megaphone, his Twitter account, punish the stock and try to renegotiate.”
“This is a great example of what you cannot do to the average investor, people that have 401ks, kids, pension funds, teachers, firemen, nurses,” said attorney Joseph Cotchett. “That’s what this case was all about. This was not about Musk. It was about the whole operation.”
CNBC reports that Musk’s attorneys will file an appeal, with damages potentially reaching as much as $2.6 billion. This figure is based on estimates of how much Musk’s comments affected Twitter’s share price, with the jury finding his remarks had artificially lowered the price of the company’s stock by between $8 and $3 a share. Musk’s representation has declined to comment. Bloomberg estimates that Musk’s net worth is around $650 billion.
Brian Belgrave, who led the class action, told the court that he had sold thousands of shares in July 2022, under the belief that Musk would not proceed with purchasing the social media platform. He sold them for significantly less than the $54.20 per share that Musk eventually paid.
“I got screwed,” Belgrave told the jury. “I got cheated.”
