A San Francisco jury found on Friday that Elon Musk misled Twitter shareholders by driving down the company's stock price ahead of his $44 billion acquisition in 2022. The verdict centers on two tweets and comments Musk made on a podcast, which the jury determined harmed investors during the takeover fight.
The decision could carry a staggering price tag. Lawyers for the shareholders say Musk could now be forced to pay former shareholders around $2.5 billion, according to The New York Times.
Musk's attorneys called the verdict a "bump in the road" and said they "look forward to vindication on appeal."
Four shareholders sued Musk in October 2022, claiming he manipulated the stock price to his advantage during the lead-up to the acquisition. The case landed in San Francisco, and the jury ultimately sided with the investors.
Joseph Cotchett, one of the investors' attorneys, told CNBC after the verdict:
"This is a great example of what you cannot do to the average investor –– people that have 401ks, kids, pension funds, teachers, firemen, nurses."
Cotchett framed the case as bigger than one man:
"That's what this case was all about. This was not about Musk. It was about the whole operation."
This wasn't the first time shareholders came after Musk over the Twitter deal. He was previously sued by Twitter shareholders in April 2022 after they claimed that the delayed disclosure of his stake in the social media company was a "mistake." Musk had become the company's largest shareholder after purchasing a 9.2 percent ownership stake. In July 2024, his lawyers argued the delay in disclosure was a simple error that caused "no harm", as The Hill reports.
The Securities and Exchange Commission piled on as well, investigating whether any federal securities laws had been violated in connection with the purchase. The SEC then sued Musk in January 2025, claiming he allegedly withheld information that allowed him to underpay for shares "after his financial beneficial ownership report was due."
Musk agreed to testify but later sought to have the case dismissed. He also attempted to move the SEC case out of Washington, D.C., but a federal judge denied his request.
There is no shortage of people in powerful places who want to see Elon Musk brought to heel. That has been true since long before he bought Twitter, renamed it X, and turned it into the closest thing to a free speech platform that Big Tech has produced. It became even more true once he stepped into the political arena.
None of that means securities law doesn't apply to him. It does. But conservatives should watch the legal machinery surrounding Musk with clear eyes. San Francisco is not a neutral venue for anyone associated with the political right, and the SEC's decision to sue in January 2025 raised its own questions about timing and motivation. The regulatory state has shown repeatedly that it knows how to weaponize process, and the people cheering loudest for this verdict are not doing so because they care about pension funds and nurses. They want Musk punished for the sin of challenging their control over online discourse.
The appeal will matter more than the verdict. Musk's legal team clearly believes the facts favor them on review, and a $2.5 billion damages figure will receive intense scrutiny at the appellate level. The question of whether two tweets and a podcast appearance actually caused measurable harm to shareholders, as opposed to the broader market chaos surrounding the acquisition, is far from settled.
For now, a San Francisco jury has spoken. The next courtroom may tell a different story.
