Split Verdict: Musk Liable for Two Misleading Tweets, Cleared of Broader Fraud Scheme

A federal jury in San Francisco has found Elon Musk liable for misleading Twitter shareholders through specific public statements made during the contentious lead-up to his $44 billion acquisition of the social media platform in 2022, which he later rebranded as X.

After several days of deliberation in a civil class-action lawsuit filed by former Twitter investors, the jury determined that two particular statements by Musk were materially false or misleading under U.S. securities laws, contributing to significant share price declines and financial harm to those who sold during the impacted trading periods.

The first involved a series of May 2022 tweets in which Musk claimed that fake or bot accounts made up a far higher proportion of Twitter’s user base than the roughly 5 per cent figure the company had publicly disclosed. The second was a statement indicating the acquisition agreement was “temporarily on hold.” These comments were judged to have driven sharp drops in Twitter’s stock price – in some cases nearly 10 per cent in a single session – resulting in losses for investors.

The verdict was not a total loss for Musk. The jury rejected the plaintiffs’ central allegation that he had orchestrated a deliberate scheme to artificially depress the share price in order to renegotiate or abandon the $54.20-per-share deal. They also cleared him of liability on at least one additional statement – a remark made during a podcast – and found no evidence of intentional overarching fraud.

The trial, which began in early March 2026, focused heavily on Musk’s repeated public assertions about Twitter’s bot problem, which he repeatedly cited as justification for seeking to terminate the agreement. Testimony from Twitter’s then-chief financial officer placed the actual bot figure closer to 1 per cent, though Musk maintained his concerns were legitimate and based on available information at the time.

The case now proceeds to a damages phase and shareholders’ counsel have projected potential liability in the billions of dollars, with the jury indicating per-share damages ranging from approximately $3 to $8 for each affected trading day. The final amount will depend on the precise calculation applied to the class of investors who sold shares during the relevant periods, though estimates suggest a total award could range from $2 billion to $3 billion or higher.

Musk’s legal team has signalled plans to appeal the liability finding, characterising it as a narrow and limited outcome rather than a comprehensive defeat. Musk had not issued a public comment on the verdict.

This represents one of the few significant courtroom setbacks Musk has faced in shareholder litigation tied to his public statements. In a notable prior case involving his 2018 “funding secured” tweet about taking Tesla private, he ultimately prevailed. The Twitter matter has generated intense online discussion, with Musk supporters framing the lawsuit as politically motivated “lawfare” in a California courtroom, while others view it as necessary accountability for a chief executive whose vast social media reach can materially influence financial markets.

The acquisition closed in October 2022 after Musk reversed his earlier attempt to terminate the deal, just ahead of a Delaware Chancery Court trial that could have compelled completion. Twitter was rebranded as X shortly thereafter.

The San Francisco verdict highlights ongoing legal and regulatory scrutiny of how influential executives use public platforms to discuss material corporate developments, particularly during pending transactions.