Tesla co-founder Elon Musk has been cleared of wrongdoing for a tweet in which he said he had “funding secured” to take the electric carmaker back into private ownership.
Shareholders argued he misled them with his posts in August 2018, and they had lost billions of dollars because of them.
The proposed $72bn (£60bn) buyout never materialised.
If found liable, Musk could have been ordered to pay out billions in damages.
It took the nine jurors less than two hours to reach their verdict on the class-action lawsuit on Friday afternoon.
Mr Musk – who had wanted the trial moved to Texas, where Tesla is based, arguing he could not get a fair trial in San Francisco – welcomed the outcome.
Taking to Twitter, the social media platform he bought for $44bn last October, he posted: “Thank goodness, the wisdom of the people has prevailed!
“I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case.”
Central to the lawsuit was Mr Musk’s tweet on 7 August 2018: “Am considering taking Tesla private at $420. Funding secured.”
The plaintiffs also argued Mr Musk had lied when he tweeted later in the day that “investor support is confirmed”.
The stock price surged after the tweets, but fell back again within days as it became clear the deal would not go through.
According to an economist hired by the shareholders, investor losses were calculated as high as $12bn, after many made decisions about buying and selling their shares based on the tweet.
The US Securities and Exchange Commission (SEC) sued Mr Musk over his tweets, accusing him of lying to investors. Mr Musk agreed to step aside as Tesla board chairman and settled for $20m.
During the three-week trial, Mr Musk – who also leads SpaceX and Twitter – had argued he thought he had a verbal commitment from Saudi Arabia’s sovereign wealth fund for the deal.
During his nearly nine hours on the witness stand, the world’s second-richest man said: “Just because I tweet something does not mean people believe it or will act accordingly.”
Shareholders had argued that “funding secured” suggested more than a verbal agreement.
Just a ‘bad tweet’?
Although Tesla’s share price shot up after the tweet was posted, Mr Musk also questioned whether his tweets had any effect on Tesla’s share price.
“At one point I tweeted that I thought that, in my opinion, the stock price was too high… and it went higher, which is counterintuitive,” he said – arguing the effect his tweets have on the stock price can be unpredictable.
Mr Musk said he eventually scrapped the plan to take Tesla private after his discussions with smaller investors led him to believe they would prefer that the firm remain publicly traded.
He was not in court when the verdict was read, but he was present during closing arguments earlier on Friday as duelling portraits were drawn of him by the rival legal teams.
Nicholas Porritt, a lawyer for the Tesla shareholders, said: “Our society is based on rules. We need rules to save us from anarchy. Rules should apply to Elon Musk like everyone else.”
Mr Musk’s attorney, Alex Spiro, said: “Just because it’s a bad tweet doesn’t make it a fraud.”
After the verdict, Mr Porritt said: “We are disappointed with the verdict and are considering next steps.”
Mr Musk was generally calm during his testimony – though at times he appeared annoyed at the line of questioning.
There were also times of levity. After a lawyer representing shareholders accidentally called Elon Musk “Mr Tweet”, Elon Musk promptly changed his name on Twitter to the same moniker.
Several Tesla directors also testified, including James Murdoch, son of Rupert Murdoch. They testified that Mr Musk did not need the Tesla board to review buyout tweets.
Securities fraud lawyer Reed Kathrein called the tweet about taking Tesla private “as concrete a statement of taking a company private as there can be”, and said the not guilty verdict was “a travesty to investors and the securities laws”.
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Elon Musk found not guilty of fraud over Tesla tweet