A federal judge in California has refused to overturn a jury’s finding that Elon Musk misled Twitter investors during his high-profile attempt to renegotiate or walk away from his $44 billion acquisition of the social media platform, dealing another legal setback to the billionaire entrepreneur.
In a ruling issued on Monday, U.S. District Judge Charles Breyer rejected Musk’s request to invalidate the jury’s March verdict, refused to dismantle the certified investor class, and approved the investors’ request for prejudgment interest. The court, however, ruled in Musk’s favor on one of the disputed social media posts, finding it did not create legal liability.
The lawsuit centered on Musk’s public statements in May 2022, shortly after announcing his agreement to acquire Twitter. Investors argued that his repeated claims about the platform being flooded with fake and spam accounts were not genuine concerns but a calculated attempt to pressure Twitter into lowering the purchase price or allowing him to abandon the deal altogether.
According to the investors, those statements triggered a sharp decline in Twitter’s stock price, causing financial losses for shareholders who sold their holdings during the market downturn.
In his order, Judge Breyer observed that a party’s second thoughts about a business transaction do not justify making misleading statements to investors. The court emphasized that regret over a deal cannot be used as a reason to provide false information to the market.
The investors’ legal team has estimated that the damages, along with interest, could ultimately reach approximately $2.6 billion.
Court Finds One Tweet Misleading, Another Not Actionable
The jury had examined two of Musk’s posts published in May 2022.
The first, posted on May 13, announced that the Twitter acquisition was “temporarily on hold” while awaiting details about the percentage of fake accounts on the platform. Investors argued that the message sent Twitter’s share price tumbling, with the stock dropping roughly 18% over the following two trading sessions.
Judge Breyer concluded there was substantial evidence supporting the jury’s finding that the statement was false. He noted that jurors could reasonably infer Musk had a motive to escape the agreed transaction and used concerns about bot accounts as a justification.
The second post, published on May 17, claimed that fake accounts could account for more than 20% of Twitter’s users and suggested the acquisition could not proceed until the company proved otherwise.
While this statement was also challenged, the judge determined it did not produce a measurable impact on Twitter’s stock price. As a result, he ruled that Musk could not be held legally responsible for that particular tweet.
Court Rejects Allegations of Jury Bias
Musk also argued that the jury had acted unfairly by highlighting the figure “$4.20” in blue ink on the verdict form, claiming the reference was intended to mock him.
The number has long been associated with cannabis culture and has repeatedly appeared in Musk’s public comments and business-related announcements. His original Twitter takeover offer valued the company at $54.20 per share, while a separate 2018 controversy involved his statement that he had “funding secured” to take Tesla private at $420 per share.
Judge Breyer dismissed the argument, saying there was no evidence the jurors were attempting to ridicule Musk. He pointed out that the jury deliberated for nearly four days and did not rule against Musk on every allegation, demonstrating a careful evaluation of the evidence rather than bias.
The judge further remarked that the number “420” is widely recognized as a reference to marijuana culture rather than an inherently negative symbol directed at Musk.
The ruling keeps intact the jury’s fraud verdict and allows the investor class action to move toward the next stage, where the amount of damages Musk may ultimately be required to pay will be determined.
