July 7 – Igeekphone News
A U.S. federal judge has rejected Elon Musk’s attempt to overturn a jury verdict finding that he defrauded investors during his 2022 acquisition of Twitter, potentially exposing the billionaire to as much as $2.6 billion in damages.
According to reports, U.S. District Judge Charles Breyer in San Francisco ruled on July 6 that the jury’s March 20 verdict would stand, denying Musk’s motion to set aside the decision.
Investment lawyers estimate that the ruling could leave Musk facing compensation claims of up to $2.6 billion.
Judge Breyer also rejected Musk’s request to dismiss the investors’ class-action lawsuit and granted the plaintiffs’ motion for pre-judgment interest. However, he ruled that Musk could not be held liable for one of the three tweets at the center of the case.
Disputed Tweets During the Twitter Buyout
The lawsuit centers on statements Musk made after agreeing to acquire Twitter for $44 billion in April 2022.
Investors alleged that Musk deliberately exaggerated concerns over fake accounts and spam bots on the platform in an effort to drive down Twitter’s share price, allowing him to renegotiate the purchase price or walk away from the deal altogether. They argued that his statements caused some shareholders to sell their stock at depressed prices, resulting in significant financial losses.
The jury found Musk liable for two tweets posted on May 13 and May 17, 2022.
In the May 13 tweet, Musk announced that the acquisition was “temporarily on hold” pending verification that fake and spam accounts represented less than 5% of Twitter’s user base. According to the investors, that statement contributed to an 18% decline in Twitter’s stock price over the following two trading days.
Four days later, on May 17, Musk tweeted that the percentage of bot accounts could be well above 20%, suggesting that the acquisition “could not move forward.”
Judge: One Tweet Was Misleading, Another Had No Market Impact
In his ruling, Judge Breyer wrote that the May 13 tweet contained “substantial evidence of falsity” and that the jury reasonably concluded Musk had a motive to use concerns about bot accounts as a pretext for backing out of the acquisition.
However, Breyer determined that the May 17 tweet did not produce a measurable impact on the market and therefore did not hold Musk liable for that statement.
Despite months of legal disputes over fake accounts and the purchase agreement, Musk ultimately completed the $44 billion acquisition of Twitter in October 2022, later rebranding the platform as X. Today, X operates under xAI Holdings, alongside Musk’s artificial intelligence company, while SpaceX remains a separate company.
More Legal Challenges Ahead
Musk has historically preferred fighting shareholder lawsuits in court rather than settling them.
In addition to this case, he is facing another lawsuit in Manhattan, where investors allege that he intentionally delayed disclosing his initial stake in Twitter. The plaintiffs claim the delay allowed him to purchase additional shares at artificially low prices before revealing his ownership to the public.