On Friday, a jury in California determined that Elon Musk had misled investors in Twitter through public statements, driving down the company’s stock price before his ultimately successful purchase of the service. Because this was a class action lawsuit, Musk is likely to suffer damages to a large range of investors – payouts that could ultimately reach billions of dollars.
In the lead up to Musk’s eventual purchase of the social media platform, he made several comments on the platform itself and appeared as a guest on a podcast, primarily focusing on the alleged proliferation of bot accounts on the platform. This led to fears that the deal would not be completed and the price of Twitter’s shares declined, causing some investors to sell shares at low prices during this period.
Several of those investors launched a lawsuit that was certified as a class action, claiming that the statements defrauded them and that Musk knowingly made them as part of a larger scheme. The jury rejected arguments about a larger scheme but found Musk liable for the tweets.
Although damages have not yet been determined, attorneys for the plaintiffs reportedly say it could ultimately reach $2.6 billion.
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