Multi-billionaire Elon Musk accuses Twitter of “fraud” in the lawsuit over the $44 billion deal he signed to acquire the company but is seeking to break up.
In a 165-page document filed Thursday evening in a Delaware state court, the boss of Tesla accuses the social network of having defrauded on the number of monetizable accounts of the social network.
A legal battle is engaged between the richest man on the planet and Twitter. Elon Musk’s lawyers accuse the social network of having “hidden the truth” about the number of 238 million monetizable daily users it claims. According to them, they are around 65 million less and “the majority of advertisements” would only be broadcast “to less than 16 million users”.
The lawsuit, which calls “misrepresentations” of the social network “sins”, states that “Twitter frantically blocked information from circulating in a desperate attempt to prevent [Elon Musk] to uncover the fraud.
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. The trial is due to start on October 17. Two weeks later, the richest man in the world had counter-attacked with a “confidential” complaint.
The Musk-Twitter saga
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 accounts on its platform.
The Tesla boss accuses Twitter’s board of covering up the true proportion of inauthentic accounts. The company estimates it to be less than 5%. According to the businessman’s lawyers, the official documents filed by the platform with the American stock market policeman “contain numerous material misrepresentations and omissions which distort the value of Twitter and led Elon Musk to agree to buy the business at an inflated price. Twitter’s strategy, they continue, has been to “play hide and seek” to keep the buyer from “discerning the truth” for as long as possible.
Twitter responds that the multi-billionaire rushed the negotiations and that the deal never mentioned the fake accounts. Lawyers for the social network thus denounce an “attempt to escape a contract that Musk no longer finds interesting since the stock market fell”.
Between the general decline in the stock market in recent months, declining social media ad revenue related to economic conditions, and public criticism from Elon Musk, Twitter’s stock crashed to around $32 on July 11. It was worth $41.97 on Friday, up 2.20%. Tesla shares fell 6.05% to $869.92.