Musk says Twitter has fraud in fake account controversy
Twitter has accused Elon Musk, in a lawsuit, of canceling plans to buy the company because the stock market turmoil made the deal more difficult for him. But responding to the legal filing, Musk said it was Twitter that attacked the acquisition. The cost is 44 billion US dollars.
Mr. Musk disputed that Twitter had hidden a false number of accounts on its platform, accusing the company of fraud. The account has at least 10 percent of Twitter’s daily active users who see ads, Musk’s legal team confirmed, underscoring concerns he expressed shortly after signing the deal in April. Twitter has maintained that the number is less than 5 percent.
“Twitter is calculating the number of false accounts and spam on its platform, which is part of its program to mislead investors about the prospects of the company,” said Mr. Musk wrote. “Twitter’s revelations have been resolved slowly, with Twitter frantically shutting down the data in a desperate bid to prevent Musk from revealing its fraud.”
Filing a confidential proposal last Friday, in part Revealed on Thursday by Twitter In a response that rejected many of Musk’s claims, it was his first broad response in what is expected to be a long legal battle between the social media company and one of the world’s richest men. The trial was set for October.
Bret Taylor, chairman of Twitter, said in a statement on Thursday that “his claims are factually incorrect, legally insufficient and not commercially relevant”.
Musk started picking up shares of Twitter earlier this year and in April amassed a majority stake in the company. He turned down Twitter’s offer to join its board, instead launching a swift and aggressive takeover effort. But when Twitter agreed to buy the business, Mr. Musk began to express doubts. In July, he indicated that he no longer wanted to buy the company.
Twitter sued him in Delaware Chancery Court in an attempt to force the acquisition through. Twitter has claimed that it lost interest in the deal as the market fell and shares in Twitter and electric car maker Tesla, the main source of Mr Musk’s wealth, fell.
“Musk refused to honor his obligations to Twitter and its shareholders because the agreement he signed no longer serves his personal interests,” Twitter said in the lawsuit.
Over the past few days, the company has hit out at Musk’s banks, financial partners and business partners, demanding communications about the deal that could shed light on why Musk decided to walk away.
The deal includes an “exclusive performance” clause that allows Twitter to sue to enforce the deal as long as the billionaire’s debt is settled for the acquisition. But Musk may pay a $1 billion fee to exit the deal if his funding falls through.
Musk has maintained that Twitter is flooded with fake accounts and that the company misled him about the true number of fakers on its platform. Fake accounts are used to spread spam or manipulate Twitter’s services by spreading false trends, and are often automated rather than operated by real people.
This is a developing story. Check back for updates.