The $44 Billion Regret
Elon Musk bought Twitter for $44 billion in 2022. He later changed the name of the company to X. Before he finished the deal, he sent many tweets about it. These tweets made the price of the stock drop. A group of investors got very angry. They sued him in a California court. This is a “class action” lawsuit called Pampena v. Musk. It means many different people are suing him together. A jury just decided that Musk was wrong.
Getting “Screwed” by a Tweet
Small investors lost a lot of money because of these tweets. One man named Brian Belgrave told the jury his story. He sold thousands of shares in July 2022. He believed the deal was dead because of what Musk wrote online. He sold his stock for a very low price. He later found out he could have made much more money. He told the court he felt “cheated” and “screwed”. Many other people like teachers and firemen also lost money in their pension funds. Experts say the stock price was pushed down by $3 to $8 per share. Total losses for everyone could be as high as $2.6 billion.
The Art of the Bad Deal
Musk claimed Twitter had too many fake accounts or “bots”. He tweeted that the deal was “temporarily on hold” in May 2022. He said the number of bots could be 20% or even higher. He did not give any proof for these big claims. The jury said these tweets were “materially false”. Investors say Musk did this on purpose. They believe he wanted to pay a lower price for the company. He was also worried because Tesla stock was losing value at the time. The jury agreed he misled people. However, they said he did not have a specific “scheme” to defraud them.
Twelve Regular People vs. The “Chief Twit”
A jury is a group of regular citizens from the local area. This jury had twelve people from San Francisco. They sat in a federal court for weeks. They watched Musk testify on the stand. They listened to all the facts from both sides. Their job was to decide if Musk broke the law with his words. In this case, all the jury members had to agree on the answer. They talked for two days before making a choice. They decided that if you move the market with your words, you must own the results.
A Very Expensive “Bump in the Road”
Musk told the jury that people “read too much” into his tweets. He said his posts were just his honest thoughts. He even admitted that he makes “stupid tweets” sometimes. He argued that he did not mean to cause any harm. Now that he has lost, he may have to pay up to $2.6 billion. Each investor could get thousands of dollars back. Musk is very rich, so this fine is a small part of his wealth. His lawyers called the verdict a “bump in the road”. They plan to fight the decision in a higher court soon.
Elon Musk is a very talented businessman. There is no doubt about that. He is very popular on social media. Millions of people follow him. They care about what he says. A jury in California just decided his words have a cost. This case is about his $44 billion purchase of Twitter in 2022. Musk renamed the company X after the deal. A group of investors sued him in a federal court. This is a “class action” lawsuit called Pampena v. Musk. The jury found that Musk was not honest with the people who owned stock. They said he misled them before the final sale.
He told the jury that people “read too much” into what he writes. He even admitted his mistake in the courtroom. He said if the trial was about “stupid tweets,” he would be guilty. This reflects his previous actions with crypto and Tesla. However, you cannot manipulate the stock market without trouble. It is like Newton’s law: every action has a reaction. Musk must now face the consequences of his typing.
He might have to pay $2.6 billion to the investors. His lawyers say this is just a “bump in the road”. They plan to fight the decision in a higher court.
– Opinion | Daily ScrollDown