Court Largely Upholds Jury Verdict Against Musk Over Twitter Tweets

A federal court largely upheld a jury verdict that found Elon Musk liable for securities fraud over his 2022 tweets suggesting that he was not obligated to complete his agreement to purchase Twitter.

In April 2022, Mr. Musk agreed to buy Twitter for about $44 billion, waiving due diligence. On May 13, 2022, Mr. Musk tweeted that the deal was "temporarily on hold" over bot and spam concerns. Following the tweet, Twitter's stock dropped sharply. On May 17, Mr. Musk issued another tweet to similar effect, alleging that the prevalence of bots on Twitter substantially exceeded the company's representations and that the acquisition could not proceed until he was provided with further information. Twitter's share price remained depressed until October 4, at which point Mr. Musk announced his intention to complete the transaction. The announcement prompted a sharp increase in the share price that same day.

The plaintiffs represent people who sold Twitter stock between May 13 and October 4, 2022. A jury unanimously found the two tweets were false or misleading and that investors were harmed; however, the jury found that Mr. Musk was not liable for specifically scheming to defraud investors.

Mr. Musk asked the court to throw out the verdict, order a new trial, or decertify the class. The court denied most of his requests. The court said the deal was never on hold and that he had known about the bot issue before his offer. The court upheld the verdict on the May 13 tweet. The court dismissed the claim on the May 17 tweet, finding no measurable price drop following that tweet. The court rejected Mr. Musk's new-trial arguments and his bid to decertify the class.

The court granted the plaintiffs' motions. It awarded prejudgment interest at the one-year Treasury bill rate, compounded annually. It approved their plan to notify the class and administer claims.