Mr. Musk’s lawyers have filed documents with the Delaware Chancery Court, their first public response to the lawsuit filed earlier this week by the social media company seeking to enforce the terms of their merger agreement. The court should dismiss Twitter’s “unjustifiable request to rush this,” they said in their filing.
Twitter asked the court to speed up the process, citing risks from the recent economic downturn and being held in limbo by a buyer. The company has requested a lawsuit by mid-September “to protect Twitter and its shareholders from continued market risk and operational damage resulting from Musk’s attempt to extricate itself from an airtight merger deal.”
Mr. Musk offered to end the acquisition last week, saying the company had failed to provide the necessary data and information he needed to assess the prevalence of fake accounts or spam and was “in material breach.” several provisions” of the merger agreement.
Twitter rejected that claim and argued that Mr. Musk breached the terms, including breaching a nondisclosure agreement and then bragging about it on Twitter.
In Friday’s filing, Mr. Musk’s lawyers said: “The central dispute over fake accounts and spam is fundamental to the value of Twitter. It is also an extremely fact- and expert-intensive activity, requiring considerable time for discovery.
Mr Musk’s lawyers argued that “there is no need to resolve these important considerations on a frantic schedule” and asked for a trial date of February 13 next year or later, adding that the debt financing was valid until April 25, 2023.
Twitter declined to comment.
Mr. Musk has criticized Twitter through a steady stream of tweets over the past few months, and his lawyers have raised specific complaints in several letters that have been made public through securities filings. But Friday’s court document is the first time his side has publicly laid out a clear timeline around its concerns over fake account and spam data, and includes new allegations about Twitter’s level of cooperation on the matter.
Mr Musk’s team worried about Twitter user numbers after the company announced revisions to its first-quarter results in April, when it said it had overestimated its user base for nearly three years until the end of 2021 due to an error in the way it counted people linked to multiple accounts. The revision reduced the number of monetizable daily active users by 0.9% for the fourth quarter of last year.
In a May 6 meeting with Twitter executives about how spam is calculated, Mr. Musk’s team said on Friday that he was “flabbergasted to learn how lean Twitter’s process was. and pointed out the lack of automated tools to help with the calculation. .
Twitter has long estimated that less than 5% of its monetizable daily active users are spam or fake accounts, a figure Mr. Musk disputed. In its lawsuit against Mr. Musk, Twitter said the Tesla Inc.
The CEO’s attempt to abandon the deal reflects deteriorating market conditions that have caused his personal wealth to decline by more than $100 billion from its peak in November 2021. “Rather than bearing the cost of the downturn of the market, as required by the merger agreement, Musk wants to transfer it to Twitter shareholders,” the company said.
Twitter had said it had bent over backwards to accommodate Mr Musk’s request for data, including giving him access to its so-called fire hose of near-real-time tweets as well as tweets historical. His side countered on Friday that the interactions were akin to “a two-month treasure hunt of delays, technical bottlenecks, evasive responses and, ultimately, denials.”
Twitter said its process for estimating fake and spam accounts on its platform involves multiple human reviews of thousands of randomly sampled accounts over time and also relies on private user data. that he does not disclose publicly and that he has not shared with Mr. . Musk—like IP addresses and phone numbers.
Mr Musk’s side also took issue with other elements of the lawsuit on Twitter, including the company’s claim that the billionaire disparaged the company he planned to buy. “With a bot’s sense of humor, Twitter claims Musk is hurting the company with tweets like a Chuck Norris meme and a poo emoji. Twitter is unaware that Musk is its second-largest shareholder with a far greater economic stake than the entire Twitter board,” the filing states.
Write to Sarah E. Needleman at [email protected]
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