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Twitter Rejects Musk's Fraud Accusations

Stock Markets Aug 05, 2022 07:47AM ET
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© Reuters Twitter (TWTR) Rejects Musk's Fraud Accusations

By Senad Karaahmetovic

Tesla (NASDAQ:TSLA) CEO Elon Musk condemned Twitter (NYSE:TWTR) for fraud, arguing the social media company provided misleading information about the condition of its business and key data related to the platform users before he agreed to purchase the company for $44 billion.

In a counter lawsuit, the Tesla boss said he decided to end the merger agreement after he learned about “troubling facts” about Twitter’s business, including the company’s restatement of its monetizable daily average users just days after the deal was signed. He alleged that Twitter misrepresented the information about the true number of false and spam accounts on the platform.

“Twitter’s own disclosures to the Musk parties show that although Twitter touts having 238 million ‘monetizable daily active users,’ those users who actually see ads (and thus, would reasonably be considered ‘monetizable’) is about 65 million lower than what Twitter represents,” Musk said in a court filing.

In response, Twitter’s board chairman Bret Taylor published a tweet saying Musk’s allegations “are factually inaccurate, legally insufficient, and commercially irrelevant.” Taylor also provided a link to Twitter’s 127-page response, adding the company is looking forward to the upcoming trial in Delaware, scheduled for October 17.

The social media giant also said Musk’s claims about being misled are implausible and added that Tesla’s CEO shouldn’t be allowed to back out of the deal solely due to his concerns over the number of spam and bot accounts.

“According to Musk, he—the billionaire founder of multiple companies, advised by Wall Street bankers and lawyers—was hoodwinked by Twitter into signing a $44 billion merger agreement,” Twitter said.

The billionaire comes up with representations Twitter never made and then tries to selectively wield the confidential data he received from Twitter “to conjure a breach of those purported representations,” the company added.

This morning, a Susquehanna analyst cut the rating on Twitter shares to Neutral from Positive with a $45 per share price target.

Twitter Rejects Musk's Fraud Accusations
 

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Comments (6)
nick cage
nick cage Aug 05, 2022 10:50AM ET
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So there are no bots on twitter. Maybe the Madam whatever her name is, is really good. oh and Bitcoin is a good investment
James Franigan
James Franigan Aug 05, 2022 10:04AM ET
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Its about time someone showed Elon that his army of followers don’t translate to anything in court
Tre Hsi
Tre Hsi Aug 05, 2022 10:03AM ET
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Elon Musk made a badly timed offer (and that's giving him the benefit of the doubt that he was a serious buyer in the first place) right before the stock market correction, so he looked for an excuse to back out the deal.......now he wants to avoid paying the breakup fee
ZS Beck
ZS Beck Aug 05, 2022 10:03AM ET
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Why do you care about the current price?You buy something for the long term, forever, because you believe you can make it better. Then just pay for it.
ZS Beck
ZS Beck Aug 05, 2022 9:42AM ET
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Pay up Musky, Twitter is yours. Next time you think twice before you say or act anything.
G D
G D Aug 05, 2022 8:56AM ET
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Elon needs to be put in his place. He's acting like he's something more than an investor that hit it big. His skills are fraud and manipulation of markets as well as busting unions and nuts into his employees
Peter Andersen
Peter Andersen Aug 05, 2022 8:06AM ET
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Elon think he is jesus but he angt hope it will cost him
 
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