Twitter claims that Elon Musk has filed a lawsuit, alleging that he abandoned the acquisition plan after the turmoil in the stock market made the transaction more difficult. But Musk hit back in legal documents, saying it was Twitter that wrecked the $44 billion acquisition.
Musk alleges that Twitter hid the true number of inauthentic accounts on its platform and accused the company of fraud. Mr. Musk’s legal team asserted that such accounts accounted for at least 10% of Twitter’s daily active users seeing ads, echoing concerns Mr. Musk expressed shortly after the deal was signed in April. Twitter claims the figure is less than 5% of his.
Twitter also hid the number of users who saw the ad, Musk’s lawyer said in documents released Thursday. In the first quarter of this year, 65 million of the company’s 229 million daily active users were not showing ads, according to filings.
Twitter said the figures were accurate, saying Musk was “trying to skew the data it receives from Twitter to support outlandish conclusions.”
Musk’s analysts used Bottom Meter, a tool created by Indiana University to measure fraudulent accounts, to find more fraudulent accounts than Twitter disclosed, according to the filing. Their analysis is preliminary and will be expanded, the filing said.
What happened to Elon Musk’s Twitter deal
Big hit contract. In April, Elon Musk made a one-sided bid worth more than $40 billion for the social network, saying he wanted to make Twitter a private company so people could speak more freely on the service.
The misrepresentation masked weaknesses in Twitter’s business model and tricked Musk into agreeing to buy Twitter at an “inflated price,” a lawyer for a Tesla executive said.
“Twitter miscounted the number of fake and spam accounts on its platform as part of a plan to mislead investors about the company’s prospects,” Musk’s attorney wrote. “Twitter’s disclosure is slowly unraveling, and Twitter is frantically closing information gates to prevent Masked parties from revealing its fraud.”
The filing, which was made last Friday but kept secret until Thursday, is Mr. Musk’s response to what is expected to be a lengthy legal battle between social media companies and one of the world’s richest people. It was the first broad response.A trial is set for October.
“His allegations are factually inaccurate, legally inadequate, and commercially irrelevant,” Bret Taylor, chairman of Twitter’s board of directors, said in a statement Thursday. The company also responded to Musk’s allegations by saying: legal filing.
The Botometer tool is unreliable, Twitter said in a filing. The company noted that the tool used different criteria than Twitter’s internal calculations, and that it once considered Musk’s Twitter account “very likely to be a bot.”
Musk began buying shares in Twitter earlier this year and became the company’s largest shareholder in April. He rejected an offer to join Twitter’s board of directors and instead launched a quick and aggressive acquisition attempt. In July, he said he didn’t want to buy the company anymore.
Twitter sued Musk in Delaware state court in an attempt to force a takeover. Twitter claims Mr. Musk lost interest in the deal as the market crashed and the shares of Twitter and electric car maker Tesla, a major source of Mr. Musk’s wealth, fell.
“Musk is refusing to perform his obligations to Twitter and its shareholders because the deals he signed no longer serve his personal interests,” Twitter said in the complaint.
Over the past few days, the company has sent subpoenas to Musk’s banks, financial partners and affiliates, demanding that they contact them about transactions that could reveal why Musk decided to step down.
The deal includes a “specific performance” clause that allows Twitter to sue to force the deal as long as there are debts the billionaire has locked in for the acquisition. But Musk could end the deal for a $1 billion fee if the fundraising fails.
Musk claims Twitter is inundated with fake accounts and that the company is misleading him about the true number of impersonations on the platform. The fake accounts are used to spread spam or manipulate his Twitter service by falsely amplifying trends, and are often automated rather than run by real people. It has been.
Twitter derives most of its revenue from advertising. But Musk argued that if Twitter was flooded with fake accounts, advertisers wouldn’t be able to reach their intended customers. His lawyers argued that inaccuracies in Twitter’s user metrics had a material negative impact on his business and that he abandoned the acquisition.
Twitter said in a message to employees seen by The New York Times that it chose not to remove Musk’s allegations because of its confidence in its own metrics. Twitter general his council Sean Edgett said:
On Thursday, Musk continued discussing how Twitter will change. “I know the product very well, so I think he knows where to direct the Twitter engineering team to make it fundamentally better.
Mike Isaac When Jack Ewing contributed to the report.