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A California judge on Friday ruled that Elon Musk misled Twitter investors ahead of his $44 billion acquisition of the social media giant in 2022.
The judge’s ruling in San Francisco federal court came in a high-profile case in which Musk was accused of lying about Twitter’s underreporting of how many fake and spammy accounts, known as bots, were on its platform.
Musk ended up buying Twitter in October 2022 and renamed it X. He then folded it into his rocket and space exploration company SpaceX.
The class action case, Pampena v. Musk, it was installed in October 2022.
“This decision sends a clear message – if you move the market with your words, your results are yours,” said Monte Mann, a trial attorney at Armstrong Teasdale. “Going forward, this will have a real negative impact. Managers and brokers will need to think carefully about how public statements can be interpreted—not just as disclosures, but as part of the conversation itself.”
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Elon Musk, the executive chairman and chief technology officer of X Corp., the company, arrives in federal court in San Francisco, California, on March 4, 2026. (David Paul Morris/Bloomberg via Getty Images)
Twitter shareholders have challenged Musk by asking publicly three times after he agreed in April 2022 to buy Twitter whether the company is full of bots, and perhaps has 20% or more than the 5% he disclosed.
The shareholders cited, among other things, a May 17, 2022 tweet in which Musk said his takeover “will not go ahead” until Twitter’s CEO proves the bot percentage is less than 5%.
“He destroyed the company. He got rid of the officers. He put the stock back in,” said the shareholders’ lawyer, Mark Molumphy, in closing arguments on Tuesday.
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Michael Lifrak, Musk’s lawyer, responded that the billionaire’s concern about bots was real, and that talking about the problem did not indicate that Musk committed or intended to commit fraud.
A California judge on Friday ruled that Elon Musk misled Twitter investors ahead of his $44 billion acquisition of the social media company. (Joel Saget/AFP via Getty Images)
Musk has often chosen to fight shareholders in court rather than settle, including a 2023 lawsuit over his Tesla electric car company and a trial over his $139 billion Tesla package.
He won both cases. Musk is now in talks to settle a lawsuit by the US Securities and Exchange Commission that accuses him of violating federal law by waiting until 2022 to disclose his first purchases on Twitter to get more before investors get involved.
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The case involves investors who sold Twitter stock between May 13 and Oct. 4, 2022. (Thomas Trutschel/Photothek via Getty Images)
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The current trial in San Francisco began on March 2. The case covers investors who sold Twitter stock between May 13 and Oct. 4, 2022.
“The decision isn’t just about Musk — it’s about the rules of modern engagement,” Mann said.
Musk is the richest person in the world, net worth
Reuters contributed to this report.
