Elon Musk is accusing Twitter of fraud for misrepresenting key metrics about users on the platform before he agreed to acquire the company for $44 billion back in April. Musk said he decided to terminate the deal after learning of what he described as troubling facts, including a restatement of Twitter’s monetizable daily active users after the agreement was signed.
“Twitter’s own disclosures to the Musk parties show that although Twitter touts having 238 million ‘monetizable daily active users,’ those users who actually see ads (and thus, would reasonably be considered ‘monetizable’) is about 65 million lower than what Twitter represents,” Elon Musk said in a court filing.
Elon Musk also argues that the company hides the real number of spam and fake accounts on its platform. Musk’s legal team claimed that such accounts make up at least 10 percent of Twitter’s daily active users who see ads. Twitter claimed the figure was under 5 percent.
The counterclaims were filed confidentially last week and unsealed Thursday in a late filing in Delaware Chancery Court.
In June, Musk said in an amended securities filing that Twitter was “actively resisting and thwarting his information rights” by refusing to provide data necessary to facilitate his own evaluation of the number of spam and fake accounts.
Bret Taylor, in a tweet on Thursday, linked to Twitter’s 127-page response and said the company looks forward to the trial in Delaware, which is scheduled for Oct. 17.
Twitter filed a response to Mr. Musk’s counterclaims. His claims are factually inaccurate, legally insufficient, and commercially irrelevant. We look forward to the trial in the Delaware Court of Chancery. See the filing here: https://t.co/beAyGqRxFL— Bret Taylor (@btaylor) August 4, 2022
Twitter said that Elon Musk has no right to back down based on concerns about the number of spam or fake accounts on the billionaire’s platform.
“According to Musk, he—the billionaire founder of multiple companies, advised by Wall Street bankers and lawyers—was hoodwinked by Twitter into signing a $44 billion merger agreement,” Twitter said.
“Musk invents representations Twitter never made and then tries to wield, selectively, the extensive confidential data Twitter provided him to conjure a breach of those purported representations,” Twitter said.