Elon Musk has been found liable in a San Francisco civil lawsuit accusing him of defrauding Twitter shareholders. The case claims Musk deliberately spread false information about the number of fake accounts on Twitter to drive down the stock price, allowing him to secure a better position in his 2022 acquisition attempt. This tactic reportedly contributed to losses of around $44 billion for Musk.
The lawsuit centered on Musk’s public statements alleging that Twitter vastly underreported its spam and bot accounts, including a controversial claim that over 20% of users were fake. These statements negatively affected investor confidence and the stock value. Shareholders’ lawyer Francis Bottini valued the damage at approximately $2.5 billion and stressed that Musk’s massive social media influence directly impacted market behavior.
Musk’s legal team has announced plans to appeal this ruling. This loss contrasts with his recent string of legal victories, including winning a 2023 fraud case related to Tesla funding and a 2024 dispute over his salary. The current suit focused on three key tweets about Twitter’s bot problem; one was deleted, while two remain under scrutiny for exaggerating the prevalence of fake accounts.
This case highlights the increasing legal risks tech billionaires face when their public comments sway markets. Musk’s attempt to manipulate perceptions of user authenticity revealed vulnerabilities in Twitter’s investor relations and raised questions about corporate transparency. As Musk appeals, the decision sets a notable precedent for accountability surrounding social media influence on stock markets.