Jurors in federal court in San Francisco found Friday that Musk intentionally misled Twitter shareholders when he tweeted that the social network — now called X — had too many fake accounts and tried to back out of the deal. The jury rejected two of the four fraud claims.

The eight-member panel calculated how much Musk’s statements drove down the company’s stock price for each trading day over a period of about five months. The amount of damages he must pay to individual investors — which could total hundreds of millions or even billions of dollars — will be determined at a later date when shareholders submit claims.

The verdict, following about three days of deliberations, marks a rare defeat in court for the world’s richest person, who has been dubbed “Teflon Elon” for his track record of winning high-stakes legal battles that many expected him to lose. 

He prevailed in a 2023 trial over Tesla Inc. investors’ allegations that he misled them in a tweet five years earlier saying he had “funding secured” to take the electric car-maker private. Musk is a co-founder of Tesla and its chief executive officer.

Mark Molumphy, a lawyer for the investors, said after the verdict he thinks the damages will amount to $2.6 billion. But even an award that high wouldn’t dent Musk’s net worth, which was $661.1 billion on Friday, according to the Bloomberg Billionaires Index.

“This case is much bigger than Twitter, this case goes right to the heart of Wall Street and what’s been going on in recent years,” said Joseph Cotchett, Molumphy’s partner at Cotchett, Pitre & McCarthy LLP. “It’s a great example of what you cannot do to the average investor.”

Musk’s lawyers declined to comment in the courtroom. Musk didn’t immediately respond to a request for comment.

In federal court, the losing side can appeal.

The jurors heard about two weeks of live testimony from Musk and top Twitter executives at the time, who recalled the turbulent six-month period in 2022 when the serial entrepreneur flip-flopped over whether he would buy the platform, resulting in hard-fought litigation with Twitter’s board of directors to force him to follow through.

The investors claimed that Musk’s social media posts and public statements — including a May 13, 2022, tweet stating the deal was “temporarily on hold” pending a review of the number of bots counted as Twitter users — was actually part of a deliberate plan to drive down the company’s stock price so he could renegotiate at a better price.

Molumphy told the jury in his closing argument Tuesday that Musk’s tweets “were not some innocent mistakes, some stupid tweet that he didn’t consider.”

“They were intentional, deliberate, and devised to convey to investors that Twitter was overrun with spam,” Molumphy said.

Musk took the stand for a whole day, and part of a second, and largely stayed on script in telling the jury he believed that the ex-Twitter executives, including Chief Executive Officer Parag Agrawal and Chief Financial Officer Ned Segal, lied to him and in public financial statements about the prevalence on the platform of spam and fake accounts, known as bots.

“Of course people were talking about a renegotiation once this bot issue came up,” Musk’s attorney, Michael Lifrak of Quinn Emanuel Urquhart & Sullivan LLP, told the jury in his closing argument. “There was no secret about that.”

The stock remained volatile for several months while Musk waffled on following through with the deal, wiping away billions of dollars in Twitter’s market value. When Twitter sued Musk in Delaware for reneging on the purchase in July 2022, the shares reached a low of $32.52, 40% less than Musk’s buyout price. 

Musk testified that he only agreed to do the deal at the original price of $54.20 per share because he believed the Delaware judge overseeing Twitter’s lawsuit was biased against him.

The billionaire argued that his tweet at the center of the lawsuit was very different from walking away from the deal entirely. “I’m not saying I’m not going to do the deal,” he told the jury. “At no point did I say the deal was canceled.”

But Musk acknowledged under questioning from a lawyer for investors that the “temporarily on hold” post was a mistake. “It may not be my wisest tweet,” he said. “I don’t know if I would call it my stupidest. But if it led to this trial it probably qualifies as such.” 

The case is Pampena v. Musk, 22-cv-05937, US District Court, Northern District of California (San Francisco).