Musk Not Guilty of Defrauding Investors Over 2018 Tweets

A US jury found Tesla Inc CEO Elon Musk and his company were not liable for misleading investors when Musk tweeted in 2018 that he had "funding secured" to take the electric car company private.

Plaintiffs had claimed billions in damages and the decision also had been seen as important for Musk himself, who often takes to Twitter to air his views, newswires said Friday.

The jury came back with a unanimous verdict roughly two hours after beginning deliberations. Musk was not present in court when the verdict was read but soon tweeted that he was "deeply appreciative" of the jury's decision.

"Thank goodness, the wisdom of the people has prevailed," he said.

Nicholas Porritt, a lawyer for the investors, said in a statement, "We are disappointed with the verdict and are considering next steps."

Shares of Tesla rose 1.6% in after-hours trading following the verdict.

"A dark chapter is now closed for Musk and Tesla," Wedbush analyst Dan Ives said. Ives added that some Tesla investors feared Musk might have to sell more Tesla stock if he lost.

The world's second-richest person has previously created legal and regulatory headaches through his sometimes impulsive use of Twitter, the social media company he bought for $44 billion in October.

Minor Myers, who teaches corporate law at the University of Connecticut and who had previously called the investors' case strong, called the outcome "astounding."

The US anti-securities fraud law "has always been thought to be this great bulwark against misstatements and falsehoods," he said. "This outcome makes you wonder if it is up to the job in modern markets," he said, adding that Musk himself was likely to "double down" on his communication tactics after the verdict.

Musk's attention has been divided in recent months between Tesla, his rocket company SpaceX and now Twitter. Tesla investors have expressed concerns that running the social media company has taken up too much of his focus.

Tesla shareholders claimed Musk misled them when he tweeted on Aug. 7, 2018, that he was considering taking the company private at $420 per share, a premium of about 23% to the prior day's close, and had "funding secured."

They say Musk lied when he tweeted later that day that "investor support is confirmed." The stock price soared after the tweets and then fell again after Aug. 17, 2018, as it became clear the buyout would not happen.