A jury in a San Francisco court found today that Elon Musk intentionally misled investors by trying to drive down the price of Twitter Inc. before buying the company. Here are the details.
Musk on the hook for billions of dollars
As reported Bloomberg:
A jury in federal court in San Francisco found on Friday that Musk intentionally misled Twitter shareholders when he tweeted that the social network, now called X, had too many fake accounts and was trying to back out of the deal. The jury dismissed two of the four fraud claims.
In 2022, Elon Musk made an unsolicited offer get Twitter is valued at $54.20 per share, valuing the company at about $44 billion. At that time, Twitter Inc.’s market value was about $36 billion.
In the weeks and months that followed, Musk tried to retreat It has repeatedly signed a contract, claiming that Twitter significantly underreports the number of bots on the platform. He eventually completed the purchase after Twitter sued to execute the contract.
When 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 down its stock price. as Bloomberg noted“The stock hit a low of $32.52 in July 2022, which is 40% less than Musk’s purchase price.”
A jury today sided with the plaintiffs, potentially putting Musk on the hook for what the investors’ attorney estimated could be as much as $2.6 billion.
The eight-member panel calculated how much Musk’s announcements lowered the company’s stock price for each trading day over nearly five months. The amount of compensation it must pay individual investors – which could run into the hundreds of millions or even billions of dollars – will be determined after shareholders file lawsuits.
Musk did not 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 WSJMusk’s lawyers have confirmed that he will file an appeal.
To read Bloomberg‘s full report of today’s decision, follow this link.
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