Musk's mask

A federal jury in San Francisco has ruled that Elon Musk misled Twitter shareholders during the acquisition process of the social network. The jury dismissed the accusation of "deliberate fraudulent activity intended to lower the stock price," which legally may mean something, but in common terms is still called misleading or manipulating the price. The businessman's lawyers announced that they would appeal, but for now, the facts recorded by the court are clear.

Specifically, the two tweets published by the Tesla CEO in May 2022 contained false statements that led to a drop in the stock price of the social network. The damages caused to shareholders would amount to $2.6 billion, according to the plaintiffs' lawyers, but the amount is neither recognized nor established by the San Francisco court.

In the spring of 2022, Elon Musk claimed that the Twitter network had more automated accounts than the 5% of the total declared in the documents submitted to the regulatory authority. This was a strong argument that Elon Musk used to justify his subsequent withdrawal from the purchase agreement. To take this step, the Tesla CEO needed to have a well-founded reason.

The result of Musk's May 2022 message was that some small shareholders sold the shares they held in Twitter, and the stock price quickly dropped by 17%. The small shareholders, today's plaintiffs, believe that it was a plan devised by Tesla's CEO precisely to pressure Twitter's Board of Directors to accept a lower price than the initial offer.

After attempting to withdraw from the purchase agreement, Twitter sued Elon Musk to enforce his commitment, a trial that did not proceed, as Musk reversed his decision and agreed to pay the initial price, before renaming the network to X. However, some shareholders had already sold their shares on the market, at a price 30% lower than that paid in the subsequent transactions by Elon Musk.

This is a rare court defeat for Musk, even if not definitive, as he is known as a businessman who manages to win lawsuits that many expected him to lose. His lawyers clarified to the France Presse agency that at the end of last week a court in Texas acquitted him in a defamation case.

Continue in NewMoney