On Friday, a jury in California determined that Elon Musk had misled investors in Twitter via public statements that depressed the price of the company’s stock ahead of his ultimately successful purchase of it. Because it was a class action lawsuit, Musk is likely to be faced with paying out damages to a huge range of investors, payments that may ultimately reach billions of dollars.
In the lead up to Musk’s ultimate purchase of the social media platform, he made a number of comments on the platform itself and while appearing as a guest on a podcast, largely focused on the prevalence of bot accounts on the platform. This raised fears that the deal wouldn’t go through and depressed the price of Twitter’s shares, causing some investors to sell shares at a depressed price during this period.
A number of those investors started a suit that was certified as a class action, claiming that the statements defrauded them, and that Musk did so intentionally as part of a larger scheme. The jury rejected the arguments about the larger scheme, but found Musk liable for the tweets.
While damages have yet to be determined, the lawyers for the plaintiffs are reportedly saying that they could ultimately reach as high as $2.6 billion.