Twitter has accused Elon Musk in its lawsuit of abandoning plans to buy the company because the stock market turmoil made the deal more difficult for him. But Musk shot back in a legal filing that it was Twitter that sabotaged the $44 billion acquisition.
Musk has argued that Twitter concealed the true number of fake accounts on its platform, accusing the company of fraud. Musk’s legal team asserted that such accounts account for at least 10 percent of Twitter’s daily active users who view ads, and reiterated concerns he expressed shortly after signing the agreement in April. Twitter insists the number is less than 5%.
Twitter also hid the number of users who saw the ad, Musk’s lawyers said in documents released Thursday. In the first quarter of this year, 65 million of the company’s 229 million daily active users didn’t see ads, the filings show.
Twitter said Musk tried to “distort data received from Twitter to support wild conclusions” and that its data was accurate.
Using Botometer, a tool designed by Indiana University to measure fake accounts, Musk’s analysts found more fake accounts than Twitter had disclosed, the documents show. Their analysis is preliminary and will expand, the document said.
What Happened to Elon Musk’s Twitter Deal
Blockbuster deal. In April, Elon Musk made an unsolicited offer of more than $40 billion to buy the social network, saying he wanted to make Twitter a private company that would give people more freedom to express their opinions on the service.
Lawyers for Tesla executives said the misrepresentations masked weaknesses in Twitter’s business model and lured Musk into agreeing to buy Twitter at a “high price.”
“Twitter miscalculated the number of fake and spam accounts on its platform as part of its plan to mislead investors about the company’s prospects,” Musk’s lawyers wrote. In a frenzy to close the door to information, desperately to prevent Musk from exposing his fraudulent activities.”
The document, filed on Friday but kept under wraps until Thursday, is Musk’s first broad view in what is expected to be a protracted legal battle between the social media company and one of the world’s richest men. respond. A trial is scheduled for October.
“His claims are actually inaccurate, legally inadequate, and commercially irrelevant,” Twitter chairman Brett Taylor said in a statement Thursday. The statement echoed Mr. Musk’s claims. legal document.
Twitter said in the filing that the Botometer tool was unreliable. The company noted that the tool used a different standard than Twitter’s internal calculations, and at one point considered Musk’s Twitter account “highly likely to be a bot.”
Mr. Musk, who started snapping up Twitter shares early this year, was the company’s largest shareholder by April. He rejected Twitter’s offer to join its board, instead launching a swift and aggressive takeover attempt. But once Twitter agreed to buy, Musk became skeptical. In July, he said he no longer wanted to buy the company.
Twitter sued Musk in Delaware Chancery Court in an attempt to force the acquisition through. Twitter said he had lost interest in the deal as the market tumbled and shares in Tesla, the electric car maker that is the main source of Musk’s wealth, fell.
“Musk has refused to meet his obligations to Twitter and its shareholders because the transactions he signed were no longer in his personal interests,” Twitter said in the lawsuit.
Over the past few days, the company has issued subpoenas to Musk’s banks, financial partners and colleagues to communicate about the deal to clarify the reasons for Musk’s decision to leave.
The deal includes a “performance-specific” clause that would allow Twitter to sue to force the deal through as long as the billionaire’s debt for the acquisition is in place. But if the funding fails, Musk could pay a $1 billion fee to walk out of the deal.
Musk insists that Twitter is riddled with fake accounts and that the company has misled him about the true number of imposters on its platform. Fake accounts are used to spread spam or manipulate Twitter’s service by falsely amplifying trends, and are often automated rather than run by real people.
Most of Twitter’s revenue comes from advertising. But Musk asserts that if Twitter is flooded with fake accounts, advertisers won’t be able to reach the customers they want. His lawyers argued that inaccurate Twitter user metrics had a material adverse effect on the business, causing him to walk away from the acquisition.
In a message to employees seen by The Times, Twitter said it chose not to edit any of Mr Musk’s statements because it was confident in its metrics. “We provide our clients with a highly sophisticated set of tools and capabilities to run and measure the effectiveness of their campaigns on our platform, backed by transparency,” said Sean Edgett, Twitter’s general counsel.
On Thursday, Musk continued to discuss how Twitter could change. “I do know this product very well, so I think I have a good idea of where to point Twitter’s engineering team to make it fundamentally better,” he said at a Tesla shareholder meeting.
Mike Isaac and Jack Ewing Contribution report.
