Tesla CEO Elon Musk has accused Twitter of fraud in its countersuit against the social media company. Twitter filed a lawsuit against the billionaire to force him into the $44 billion deal to buy the platform. “The Musk Parties Bring Their Counterclaims for Breach of Contract and Termination Based on Twitter Fraud.”
Elon Musk’s legal battle with Twitter escalates
Tesla and Spacex CEO Elon Musk has filed a countersuit against Twitter after the social media giant sued him for ending the $44 billion deal to buy the platform. Musk’s countersuit, filed Thursday and released Friday, states:
This action stems from Twitter’s misrepresentations to the Musk parties regarding the state of the business and the “key metrics” Twitter uses to gauge the number of users on its platform.
“Twitter miscounted the number of fake accounts and spam on its platform, as part of its scheme to mislead investors about the company’s prospects by focusing on its alleged hundreds of millions of mDAUs,” alleged Musk. The social media company defines monetizable daily active users (mDAUs) as “users who logged in and accessed Twitter on any given day through Twitter.com or Twitter applications capable of delivering advertisements.”
The countersuit describes: “After the signing of the merger agreement, however, the Musk parties learned of troubling facts that seriously cast doubt on Twitter’s representations.”
“While Twitter asks the court to compel the Musk parties to shut down Twitter’s misrepresentations and breaches of contract, the Musk parties seek redress for the gross unfairness of such an outcome,” Musk’s attorneys noted, adding:
Accordingly, the Musk parties present their counterclaims for breach of contract and termination based on Twitter’s fraud.
Twitter filed a series of rebuttals to Musk’s countersuit on Thursday, accusing the Tesla CEO of picking numbers and misrepresenting how its online advertising system works.
Twitter board member Bret Taylor tweeted in response to Musk’s allegations:
Twitter has filed a response to Mr. Musk’s counterclaims. Its assertions are factually inaccurate, legally insufficient and commercially irrelevant. We look forward to the trial in the Delaware Court of Chancery.
Twitter has subpoenaed crypto exchange Binance and more than a dozen of Musk’s potential advisers and lenders in its lawsuit against the Tesla CEO. In May, Musk revealed that he had secured funding from 18 companies to buy Twitter, including Binance.
Other companies and individuals cited by Twitter included Factorial Funds, Benefit Street, Bandera Partners, Founders Fund Growth II Management, Citadel CEO Ken Griffin, Tesla and Spacex. The subpoenas require them to turn over documents and communications that support or refute Musk’s accusation that Twitter underreported the number of fake or spam accounts on its platform.
Musk formally terminated the $44 billion deal to buy the social media giant last month, alleging “Twitter is in material breach of several terms of that deal.” The billionaire’s attorney noted that Twitter had made “materially inaccurate statements,” particularly regarding the company’s claim that less than 5% of its mDAUs are fake or spam accounts.
Twitter responded by suing Musk last month to force the Tesla boss into the takeover deal, saying “Musk refuses to honor his obligations to Twitter and its shareholders because the deal he signed doesn’t serve any purpose. more his personal interests”. The case is scheduled to go to trial on October 17.
Do you think Twitter or Elon Musk will win this case? Let us know in the comments section below.
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