Elon Musk Twitter verdict misled investors before $44 billion purchase
Elon Musk Found Guilty of Defrauding Twitter Shareholders
A jury in California has ruled that Elon Musk defrauded Twitter shareholders leading up to his acquisition of the social media platform for $44 billion. The verdict, issued on Friday, could result in damages totaling up to $2.6 billion, according to the plaintiffs’ attorneys.
The class action lawsuit, known as Pampena v. Musk, was filed in October 2022 following Musk’s purchase of Twitter for $54.20 per share. Musk later rebranded the company as X, merged it with his AI company xAI, and then with SpaceX.
Attorney Joseph Cotchett, representing the Twitter investors, emphasized the impact on average investors such as those with 401ks, pension funds, and other savings. He stated, “This is a great example of what you cannot do to the average investor.”
Following Musk’s bid to buy Twitter in April 2022, his public statements regarding the deal caused shares to plummet. The jury unanimously found that Musk’s tweets were materially false or misleading, leading to stock price declines and financial losses for shareholders.
While Musk’s attorneys plan to appeal the verdict, the outcome serves as a significant setback for the billionaire entrepreneur. Despite the potential damages, Musk’s substantial net worth of $650 billion mitigates the financial impact.
It is estimated that it will take approximately 90 days to set up claims administration for investors to begin recouping their losses. Musk’s defense argued that his concerns about Twitter’s bot and spam accounts were legitimate and not intended to defraud investors.
Overall, the verdict highlights the consequences of Musk’s actions on Twitter shareholders and raises questions about the ethical implications of his behavior in the business world.
