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 deal 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 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 disclosures are slowly unraveling, and Twitter is desperately closing its gates of information to prevent Mask parties from revealing its fraud.”
Some of the confidential documents submitted last Friday, Disclosed by Twitter on Thursday Musk’s response, which denied many of his claims, was his first broad response to what is expected to be a lengthy legal battle between a social media company and one of the world’s richest people. A trial is set for October.
“His allegations are factually inaccurate, legally inadequate, and commercially irrelevant,” Bret Taylor, Twitter’s chairman of the board, said in a statement Thursday.
Musk began buying shares in Twitter earlier this year and by April had acquired a majority stake in the company. 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 him in Chancery Court, Delaware in an attempt to force the acquisition. 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 “certain 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.
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