– Elon Musk accuses Twitter of ‘hiding the truth’ and ‘fraud’
A legal battle has raged between Elon Musk and Twitter since the world’s richest man broke the agreement to take over the social network.
Multi-billionaire Tesla boss Elon Musk has accused Twitter of “fraud” in the legal battle to buy the social network for $44 billion, an agreement he now wants to break.
Elon Musk asserts that Twitter “cheated” by voluntarily increasing the number of monetizable accounts, according to his arguments filed in court Thursday night and consulted by AFP on Friday. The Tesla boss filed a lawsuit against Twitter in late July after he himself was sued by the platform, which wants to ask him to keep his purchase promise.
In this 165-page document, his lawyers accuse Twitter of “hiding the truth” by claiming it has 238 million monetizable daily users, but it’s actually 65 million fewer. In addition, “the majority of advertising” would only be broadcast to “fewer than 16 million users, a fraction” of what Twitter claims.
The complaint, which calls the social network’s “misrepresentations” a “sin,” alleges that “Twitter desperately blocked the spread of information in a desperate attempt to prevent (Elon Musk) from exposing the scam.”
Elon Musk took to Twitter in April and then signed an agreement to buy the social network for $54.20 per share. He unilaterally broke that promise in early July, arguing that the company lied about the proportion of automated and spam accounts on its platform. Now a lawsuit is going on.
In fact, in early July, Twitter sued Elon Musk in the Delaware Court of Chancery, a court specializing in commercial law, to force him to fulfill his promise. Two weeks later, Elon Musk countered with a “confidential” complaint filed in the same court. He is asking the court to release him from the agreement and order Twitter to pay damages.
A trial is scheduled to open on October 17 and last five days. Before that, Twitter shareholders will meet on September 13 to approve or not this acquisition, which would represent significant shareholder value.
“Musk’s counterattack on Twitter raised some interesting points, but Wall Street sees it as a sign of weakness rather than strength for Musk as he heads to the Delaware courts,” Wedbush Securities analyst Dan Ives told AFP. In his opinion, Twitter is in a good position to win the battle against the billionaire.
“Escape a Contract”
Twitter filed its response to Elon Musk’s lawsuit in court on Thursday. According to this document, the Tesla boss accuses the board of hiding the true proportion of fake accounts, although Twitter assures that it is less than 5%. The platform replies that the businessman rushed the negotiations and that the agreement never mentioned the fake accounts.
The social network’s lawyers denounced an “attempt to escape a contract that Musk hasn’t found interesting since the stock market crashed.” Between the general decline in the stock market over the past few months, the decline in social media advertising revenue related to the economy, and public criticism from Elon Musk, Twitter’s stock had plummeted to around $32 on July 11.
It was worth $42.52 at Friday’s close, up 3.56%. Tesla stock fell 6.63% to $864.51. Elon Musk was asked about the situation on Twitter during Tesla’s annual general meeting on Thursday evening.
Cautiously, while in the middle of a legal tussle, the entrepreneur asserted with satisfaction: “I use Twitter a lot (…) and since I understand this product very well, I have a good idea of how to guide the engineering team at Twitter, to radically improve the product. But “I don’t need Twitter for that,” he added.