- Musk made several claims against Twitter, including about the strength of its user metrics.
- He said that Twitter is trying to “distract” from his many “misrepresentations”.
- Twitter responded, saying the billionaire’s story is “implausible and contrary to fact.”
by Elon Musk confidentially archived The 164-page countersuit against Twitter is filled with allegations about the validity of the social media company’s business claims, according to a copy obtained by Insider.
The countersuit is yet another escalation of the ongoing legal fight over Musk’s attempt to back out of his $44 billion deal to buy Twitter. The billionaire and the platform are already scheduled to face off in an october trial in Delaware court on whether it is legally capable a walk away from the try to acquire the platform.
In his counterclaims, Musk argues at length that he has the right to walk out of the deal altogether. He claims that, through Twitter’s public assurances to investors, he was led to believe that his business, built around user metrics, was sound. They are far from it, he affirms. For months, Musk has publicly argued that Twitter had more robots or spam accounts than it allowed. After asking for more and more information on the subject, in early July she decided cancel the deal.
Now, he accuses the company of intentionally “miscounting” the number of spam accounts it hosts to take advantage of its user metrics “as part of its scheme to mislead investors about the company’s prospects.” He also claims that Twitter’s reliance on the metric mDAU, or Monetizable Daily Active Twitter Users, as a revenue base is itself misleading. Meanwhile, Twitter actually has 65 million fewer daily users than he claims, according to Musk. And those who see ads, and should be considered “monetizable”, are only 16 million users.
Twitter’s lawsuit to enforce the merger agreement is “filled with personal attacks on Musk and garish rhetoric more directed at a media audience than this court” and “is nothing more than an attempt to distract attention from these misrepresentations,” Musk’s counterclaims read.
“That has been Twitter’s strategy all along: to distract and obfuscate the truth about its disclosures, first from its investors and then from the Musk Parties as they began to discern the truth,” the claims continue.
Twitter rejected Musk’s accusations. He filed a response in court after hours calling the billionaire’s claims “an invented story” in an effort to escape a merger deal that Musk no longer found attractive once the stock market, and along with it, His enormous personal wealth diminished in value.”
“Counterclaims are a story made for litigation that is contradicted by evidence and common sense,” Twitter added.
Musk’s counterclaims were initially not available to the public because they allegedly contained private company information that needed to be redacted, Twitter’s lawyers argued. After days of back-and-forth between lawyers on each side, the judge overseeing the case in the Delaware Court of Chancery said the lawsuit was due to go public on Friday.
Musk faces an uphill battle in his efforts to back out of the deal because of the ironclad contract he signed earlier this year, according to multiple experts. he previously told Insider.
But his counterclaim is an attempt to create a path out of the deal. While Twitter has repeatedly pointed out that Musk waived his right to information before signing the merger agreement, Musk says he was taking the traditional “trust but verify” route, meaning he was relying on Twitter’s public disclosures and he later validated them, and negotiated the deal. right to do so.
“The Musk parties… expected that Twitter would hide nothing from its potential owner, including the extent of its spam or fake account problem,” the complaint says. Instead, the opposite happened. Twitter played a game of hide-and-seek for months to try to run out time before the Musk Parties could discern the truth about these renderings, which they needed to shut down. The more Twitter evaded even simple queries, the more they grew. the Musk Parties to suspect that Twitter had misled them.”
He did it intentionally, he claimed. The platform’s user authentication process is weak, according to the counterclaims. The company doesn’t send emails, text messages or other push notifications to users to verify them, and its CEO, Parag Agrawal, reportedly couldn’t explain to Musk how he selected which accounts to run by human moderators.
Twitter has given Musk massive amounts of information about accounts and users. Although Musk’s claims refer to him as “limited”, your analysis so far it supposedly shows “shocking results”. In early July, for example, a review by Musk insiders showed that “a third of visible accounts may have been fake or spam accounts.” To him, this means that a “conservative minimum” for spam accounts on the platform is 10%, not the 5% that Twitter publicly claims.
This, combined with the accusation that Twitter’s mDAUs are much lower than it has claimed, means Musk has every right to terminate his deal to acquire the company, he said. Musk asked the court to terminate the merger agreement and for undisclosed compensatory damages.
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