Illustration by Dado Ruvic/Reuters
Twitter lawyers attacked Elon Musk in a new court filing Thursday, claiming the billionaire is trying to extricate himself from his $44 billion acquisition deal because “the stock market—and with it, his vast personal wealth “- The price has dropped.
Lawyers rejected the notion that Musk was somehow “hoodwinked” into agreeing to buy the company, noting that he is the “billionaire founder of several companies” and that he was “held by Wall Street bankers and lawyers”. Advice has been given.”
The filing, made in the Delaware Court of Chancery, was submitted in response to a separate brief that Musk filed late last month. Surprisingly, Musk’s own filing has yet to be made public, due to potential corrections that still need to happen. This has given Twitter an opportunity to push its narrative by force.
“The counterclaims are a litigation story that is contrary to evidence and common sense,” said Twitter’s filing about Musk’s allegations. “Musk invented representations that Twitter never made and then selectively, comprehensively confidential data Twitter tried to provide him to acknowledge the breach of those alleged representations.”
One of Musk’s primary gripes is whether Twitter has misrepresented the number of authentic users on its platform. The company has estimated the number of fake accounts or “bots” on the platform to be less than five percent of its users. In his counter filing, Musk claims the percentage is close to double that number, and “preliminary expert estimates” showed that a third of the accounts visible in July may be false or spam accounts.
The billionaire claimed that the platform doesn’t have 238 million monetizable daily active users — or users who view ads on the site — and that number is actually 65 million fewer than the company’s. He also claimed that the bulk of Twitter ads are served to only 16 million users, a number far below what he had “misleadingly” described on the market.
In response, Twitter slammed Musk’s bot estimates as “nothing more than the output of running erroneous data through a simple web tool” and noted that the app he used to arrive at these guesses , he had previously flagged his own account as a possible fake. , The claims about its active daily users, it says, are distilled from a distorted version of the “wild conclusions” facts that Twitter itself supplied to Musk.
Musk’s lawyers did not immediately respond to the Daily Beast’s request for comment.
Elon Musk abandons $44 billion Twitter deal
The social media giant is hoping a judge will force Musk to comply with the terms of the buyout deal, which did not give him the right to additional due diligence. Some legal experts have expressed doubts about whether Musk’s arguments will hold up, noting that the Delaware Court of Chancery has historically taken a narrow view of when buyers can refuse agreements they signed.
Twitter’s dealings with Musk have caused non-stop headaches for its execs since last spring, when Musk first announced that he had acquired a significant ownership percentage in the business. He later agreed to join the company’s board, then changed his mind at the last minute.
Soon after, Twitter invoked a so-called “poison pill,” which hampered Musk’s ability to gain a controlling stake in the business. Eventually, the billionaire made an offer to buy the entire company for $54.20 per share (marijuana reference likely intentional), and Twitter’s board agreed.
But the stock market fell sharply and Twitter’s stock is now trading at around $41 per share. (The stock has risen in recent weeks, perhaps because some investors think the deal will finally be done.)
Unless the parties somehow resolve the dispute on their own, the court will decide what will happen next. A trial in this case is scheduled for October 1.
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