Elon Musk Ordered to Pay $2.8 Billion for Misleading Twitter Investors and Manipulating Stock Value
Elon Musk acquired Twitter at the end of 2022, but the deal still raises a lot of questions.
The Federal Court of San Francisco found the richest man in the world guilty of misleading Twitter investors and making manipulative statements that allowed him to undervalue the deal.
What Musk is Guilty of
The court confirmed the plaintiffs' claims on two out of four counts. Musk used publicity and the enormous attention to his messages to influence the negotiations on buying Twitter. In particular, on May 13, 2022, he tweeted that the deal was “temporarily on hold” pending a “check of the number of bots.” The jurors agreed that this statement put pressure on the network's management and investors and artificially reduced Twitter's stock value.
The jury estimated the approximate compensation that Musk should pay to investors. Taking into account five months of trading while Musk was “counting bots,” the court ordered the billionaire to pay $2.8 billion.
Musk's Response
Elon Musk's lawyers intend to appeal the verdict on the grounds that the court did not recognize the existence of a massive fraud scheme overall and called the decision “a minor obstacle along the road.” Musk acknowledged that the tweet about the deal hold was “possibly a mistake,” but maintained that he truly considered Twitter's bot data unreliable and never definitively stated withdrawal from the deal.
The Federal Court's decision was one of the rare instances where the unsinkable Musk was found guilty.
Sources: Bloomberg
