The standoff is engaged between the richest man on the planet and Twitter. Multi-billionaire Tesla boss Elon Musk accuses the social network of ” fraud “ in the lawsuit over the $44 billion deal he signed to acquire the company but is now seeking to break.
Elon Musk, in arguments filed Thursday, August 4, in a Delaware state business court, accuses Twitter of having “masked the truth” on the number of 238 million monetizable daily users claimed by the social network, according to this 165-page legal document consulted Friday by Agence France-Presse.
According to the billionaire’s lawyers, they are around 65 million less and “the majority of advertisements” would only be broadcast“with less than 16 million users, a fraction” what Twitter claims. The complaint, which qualifies “misrepresentations” of the social network of “sins”affirm that “Twitter frantically blocked information from circulating in a desperate attempt to prevent [Elon Musk] to uncover the fraud.
Elon Musk approached Twitter in April, then signed a buyout deal for $54.20 a share. He unilaterally ended it in early July, on the grounds that the San Francisco-based company allegedly lied about the proportion of automated and spam accounts on its platform.
In mid-July, Twitter sued Elon Musk in the Delaware Court of Chancery, a court specializing in business law, to force him to honor his acquisition commitment for $ 44 billion. Two weeks later, the richest man in the world had counterattacked with a complaint “confidential”. The trial is due to start on October 17.
Previously, the shareholders of Twitter will meet on September 13 to authorize or not this acquisition, which would represent a substantial added value for the shareholders.
“Distorting the value of Twitter”
The official documents filed by the platform with the American stock market policeman “contain numerous material misrepresentations and omissions that distort Twitter’s value and led Elon Musk to agree to buy the company at an inflated price”, assure the lawyers of the businessman in their arguments. Twitter’s strategy, they continue, has been to ” to play hide and seek “ to prevent the buyer from “to discern the truth”.
Twitter responds that the businessman rushed the negotiations and that the agreement never mentioned the fake accounts, and the social network’s lawyers denounce a “attempt to escape a contract that Musk no longer finds attractive since the stock market fell”.
Between the general decline in the stock market in recent months, the decline in social media advertising revenue linked to economic conditions and public criticism from Elon Musk, Twitter’s stock collapsed to around $32 on July 11. It was worth Friday at the close of 42.52 dollars, up 3.56%. The title of Tesla lost him, 6.63% to 864.51 dollars.
Elon Musk was questioned Thursday evening during the general meeting of shareholders of Tesla on the situation with Twitter. Cautious, the entrepreneur had contented himself with affirming: “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 make the product radically better”. But “I don’t need to have Twitter for that”he added.