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Lawyers for the plaintiffs have indicated that total damages in the case could reach up to $2.6 billion, depending on the number of claims filed & how compensation process unfolds.
Musk was found to mislead investors during his attempt to acquire Twitter in a $44 billion deal in 2022 by a California-based jury
A US jury has delivered a split verdict against Elon Musk in a high-stakes securities class action linked to his 2022 acquisition of Twitter, holding that some of his public statements misled investors but stopping short of calling it a deliberate fraud.
The case, Pampena v. Musk, was filed by former Twitter shareholders who alleged that Musk’s tweets and public comments during the deal created confusion in the market and led to financial losses.
What triggered the dispute
In April 2022, Musk agreed to buy Twitter for $44 billion, valuing the company at $54.20 per share. However, within weeks, he began publicly questioning the company’s disclosures around spam and fake accounts. On May 13 and May 17, he said the deal was “on hold” until more clarity was provided.
These remarks led to a sharp fall in Twitter’s share price, with the stock dropping nearly 10 percent in a single session. Investors argued that such statements created uncertainty around the deal and forced many to sell their holdings at prices lower than the agreed acquisition price.
What shareholders alleged
The plaintiffs claimed that Musk’s statements were materially false and misleading and were aimed at pressuring Twitter’s board to renegotiate the deal at a lower valuation. They argued that the timing of his remarks coincided with broader market pressures, including a decline in Tesla shares, which could have impacted his ability to finance the acquisition.
According to the investors, the alleged misrepresentation caused direct financial harm, particularly to retail shareholders and options traders who exited their positions during the period of uncertainty.
What the jury found
After deliberating for four days, the jury concluded that Musk’s tweets were indeed false or misleading and that they had an adverse impact on certain investors. However, it did not find evidence of a structured or intentional scheme to defraud shareholders.
This distinction is significant. While the verdict acknowledges misleading conduct, it stops short of establishing a full-fledged securities fraud conspiracy, which would have carried more serious legal consequences.
Damages and next steps
Lawyers for the plaintiffs have indicated that total damages in the case could reach up to $2.6 billion, depending on the number of claims filed and how the compensation process unfolds. The claims administration process is expected to begin in about 90 days, after which eligible investors may start receiving compensation.
Musk’s legal team has said the verdict is only a temporary setback and has indicated plans to challenge the decision in appeal, maintaining that his statements were based on genuine concerns about the platform.
Developments after the acquisition
Despite the controversy, Musk went ahead with the acquisition and later rebranded Twitter as X. The platform has since been integrated with his artificial intelligence venture xAI, alongside his broader business ecosystem that includes SpaceX.
March 21, 2026, 09:39 IST
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