The of Elon Musk canceled takeover of the short message service Twitter developed, not entirely unexpectedly, into a legal mud fight. After all, it’s about $44 billion that the Tesla boss had contractually promised for the takeover, but now no longer wants to pay. Twitter then sued the billionaire and Musk filed a countersuit last week. The lawsuit was unsealed on Thursday evening (local time), Musk makes serious allegations against Twitter.
In the complaint in which the “Wall Street Journal”
and the “Financial Times”
According to reports, Musk accuses the management of Twitter of fraud, that Twitter misrepresented important key figures about the users of the platform before the contractually agreed takeover last April.
Controversy over “monetizable daily active users”
The core question is how much money can be made with Twitter users. Twitter told Musk that they had 238 million “monetizable, daily active users”. However, the number of users who actually see advertising – and can therefore reasonably be considered “monetizable” – is around 65 million lower than the number communicated by Twitter, the WSJ reports on a central allegation from the lawsuit. Another is known to be that some Twitter users allegedly do not exist and are fake accounts.
Twitter strongly disagrees with Musk’s statements. His claims are “factually inaccurate, legally inadequate and commercially irrelevant,” Brad Taylor, CEO of the short message service, tweeted, linking to a more than 100-page response from the company.
Is Musk wrong?
The method on which Musk’s estimates are based is “unsustainable” and “does not measure the same as Twitter or even use the same data as Twitter,” the short message service countered on Thursday. Twitter has questioned the veracity of Musk’s data, claiming that a tool allegedly used to analyze the data classified the billionaire’s account as a “probable bot.”
Twitter concludes, according to FT, “Musk’s counterclaims based on misrepresentation, misrepresentation and outright deception change nothing.” The billionaire has no right to back down over his concerns about the number of spam or possibly fake accounts on the platform.
Musk’s own analysis is said to be based on an undisclosed but publicly accessible website. According to the lawsuit, fake or spam accounts account for at least 10 percent of Twitter’s daily active and monetizable users.
In its statements, Twitter again refutes the claim that the company did not provide Musk with the necessary data and information that he needed to assess the proliferation of possible fake accounts. On the contrary, Twitter provided him with “massive data streams” and “expended considerable time and resources” to compile the data collections and information requested by Musk.
However, in its Thursday statement, Twitter acknowledged that it had not informed Musk before signing the deal on April 25 that it had overstated its user base for about three years through the end of 2021. Twitter updated the numbers, which ultimately represented a small 1 percent change, in its April 28 annual report. At the same time, the company emphasizes that the annual report does not contain any materially incorrect statements or admissions.
Musk and Twitter interrogate the banks of the other side
It is clear that the dispute with the counterclaim and the prompt reply from Twitter is gaining legal momentum and that each side will collect plenty of material before the scheduled court date on October 17th in Delaware.
The lawyers for Musk have summoned Goldman Sachs and JPMorgan Chase to learn details about how they advised Twitter, writes the “Financial Times”. Accordingly, Musk requested all documents detailing the financial performance, discussions with the company about the deal and analysis of the valuation. Conversely, Twitter has sent requests for information to Musk’s banks, which accompanied the deal, as well as to co-investors and other people associated with the billionaire.