Elon Musk, perpetual proof that money can’t unlame you, took a loss in court last week. Nowadays, it is easy to say that his purchase of the company formerly (and currently) known as Twitter at an above-market cost so he could make a 420 joke in the hopes that his then girlfriend would find it funny was dumb. It was easy to say so back then too, but I digress. A lawsuit alleging that Musk misled Twitter investors resolved after years of litigation. And while the jury did find that he was not guilty of a greater fraud scheme, the outcome was not entirely in his favor. CNBC has coverage:
A jury in California found that Elon Musk defrauded Twitter shareholders during the runup to his $44 billion acquisition of the social media company, according to a verdict issued on Friday.
Total damages could reach up to $2.6 billion, attorneys for the plaintiffs said.
The class action lawsuit, Pampena v. Musk, was originally filed in October 2022, after Musk completed his purchase of Twitter for $54.20 per share.
…
“This is a great example of what you cannot do to the average investor — people that have 401ks, kids, pension funds, teachers, firemen, nurses,” Joseph Cotchett, an attorney for the Twitter investors, told CNBC at the San Francisco courthouse.
Considering he was clocked at over ~$800B last month, they could round up the damages to a nice $3B (perhaps to make his ex laugh) and it would still be a rounding error compared to his hoarded wealth. To be frank, daily fluctuations in the market will probably have a bigger outcome than this decision — Bloomberg’s current valuation of him at $641B reads less like “This guy lost ~$160B in a month!” and more like “Hey, we all have rough Mondays.” And before any poindexters respond, “Well actually most of the wealth is locked in stock so it isn’t liquid,” he could just sell some of his shares. Plenty of people have had to do things like sell their homes to pay off legal fees; there’s no use in pretending that liquefying your assets becomes some huge burden once you become rich. Further, it would make for a nice full circle moment given that he sold some of his Tesla shares as part of the plan to buy Twitter back in 2022.
Represented by Quinn Emanuel, Musk intends to appeal the verdict. And good on them. If there’s a guy you should be cranking billable hours out of, it’s this guy.
Elon Musk Misled Twitter Investors Ahead Of $44 Billion acquisition, Jury Says [CNBC]
Chris Williams became a social media manager and assistant editor for Above the Law in June 2021. Prior to joining the staff, he moonlighted as a minor Memelord™ in the Facebook group Law School Memes for Edgy T14s . He endured Missouri long enough to graduate from Washington University in St. Louis School of Law. He is a former boat builder who is learning to swim and is interested in rhetoric, Spinozists and humor. Getting back in to cycling wouldn’t hurt either. You can reach him by email at cwilliams@abovethelaw.com and by tweet at @WritesForRent.
The post Twitter Buyout Jury Decision Could Leave Elon Musk On The Hook For $2.6B appeared first on Above the Law.
Elon Musk, perpetual proof that money can’t unlame you, took a loss in court last week. Nowadays, it is easy to say that his purchase of the company formerly (and currently) known as Twitter at an above-market cost so he could make a 420 joke in the hopes that his then girlfriend would find it funny was dumb. It was easy to say so back then too, but I digress. A lawsuit alleging that Musk misled Twitter investors resolved after years of litigation. And while the jury did find that he was not guilty of a greater fraud scheme, the outcome was not entirely in his favor. CNBC has coverage:
A jury in California found that Elon Musk defrauded Twitter shareholders during the runup to his $44 billion acquisition of the social media company, according to a verdict issued on Friday.
Total damages could reach up to $2.6 billion, attorneys for the plaintiffs said.
The class action lawsuit, Pampena v. Musk, was originally filed in October 2022, after Musk completed his purchase of Twitter for $54.20 per share.
…
“This is a great example of what you cannot do to the average investor — people that have 401ks, kids, pension funds, teachers, firemen, nurses,” Joseph Cotchett, an attorney for the Twitter investors, told CNBC at the San Francisco courthouse.
Considering he was clocked at over ~$800B last month, they could round up the damages to a nice $3B (perhaps to make his ex laugh) and it would still be a rounding error compared to his hoarded wealth. To be frank, daily fluctuations in the market will probably have a bigger outcome than this decision — Bloomberg’s current valuation of him at $641B reads less like “This guy lost ~$160B in a month!” and more like “Hey, we all have rough Mondays.” And before any poindexters respond, “Well actually most of the wealth is locked in stock so it isn’t liquid,” he could just sell some of his shares. Plenty of people have had to do things like sell their homes to pay off legal fees; there’s no use in pretending that liquefying your assets becomes some huge burden once you become rich. Further, it would make for a nice full circle moment given that he sold some of his Tesla shares as part of the plan to buy Twitter back in 2022.
Represented by Quinn Emanuel, Musk intends to appeal the verdict. And good on them. If there’s a guy you should be cranking billable hours out of, it’s this guy.
Elon Musk Misled Twitter Investors Ahead Of $44 Billion acquisition, Jury Says [CNBC]
Chris Williams became a social media manager and assistant editor for Above the Law in June 2021. Prior to joining the staff, he moonlighted as a minor Memelord™ in the Facebook group Law School Memes for Edgy T14s . He endured Missouri long enough to graduate from Washington University in St. Louis School of Law. He is a former boat builder who is learning to swim and is interested in rhetoric, Spinozists and humor. Getting back in to cycling wouldn’t hurt either. You can reach him by email at [email protected] and by tweet at @WritesForRent.
