A US jury has found Elon Musk misled investors by deliberately driving down Twitter’s share price in the months leading up to his $44bn (£33bn) takeover of the social media company.
But the tech tycoon, and the world’s richest person, was cleared of some fraud allegations in the civil trial in San Francisco.
The case centred on a class-action lawsuit, filed just before Mr Musk took control of Twitter, which he later renamed X.
Jurors were asked to decide if two tweets and comments Mr Musk made on a podcast in May 2022 amounted to him intentionally defrauding Twitter shareholders, who sold their shares based on his statements.
It is not clear what amount in damages Mr Musk will have to pay to thousands of shareholders, many of them institutional investors, but it is likely to be in the billions.
Elon Musk denied defrauding shareholders during a court appearance earlier in March. Pic: AP
His fortune is currently estimated at about $814bn (£610bn), much of it tied up in Tesla shares.
Much of the case surrounded Mr Musk’s claim that the social media platform had underreported how many fake and spam accounts, known as bots, were on its platform.
The court was shown a tweet in May 2022 where the tycoon said his takeover “cannot go forward” until Twitter’s chief executive proved the bot percentage was less than 5%.
“He trashed the company. Trashed the executives. And tanked the stock,” the shareholders’ lawyer, Mark Molumphy, said during his closing argument on Tuesday.
Michael Lifrak, a lawyer for Mr Musk, argued that the billionaire’s concern about bots was real, and that speaking out about the problem did not show he committed or intended to commit fraud.
Mr Musk used what he called Twitter’s misrepresentation of the number of fake accounts on its service as a reason to retreat from the purchase.
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After he tried to back out, Twitter took legal action to force him to honour his original deal.
Mr Musk eventually agreed to pay what he had originally promised and ultimately completed his purchase of Twitter in October 2022.
The billionaire is separately in talks to settle a US Securities and Exchange Commission civil lawsuit.
It accuses him of waiting too long in 2022 to disclose his initial purchases of Twitter so he could buy more at low prices before investors saw what he was doing.
