Elon Musk accused Twitter of fraud in the countersuit released amid his legal battle with the social media company over his terminated acquisition of the platform.
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Musk filed his countersuit on July 29 confidentially and unsealed the document late Thursday, according to the Wall Street Journal. The billionaire argued in his filing that he was led to believe that Twitter’s business was sound but that his attempts at research and analysis of the company’s accounts led him to conclude that there were more spam bots than initially reported, thus making the company less valuable than thought. Musk also accused Twitter of “miscounting” its spam accounts to improve its user metrics.
“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’s legal team argued in the court filing.
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Musk argued that many of the platform’s monetizable users don’t add to the company’s success due to them not being shown ads. “In fact, the majority of ads are served to less than 16 million users — a mere fraction of the 238 million,” he said.
Twitter responded Thursday by dismissing Musk’s arguments and pointing to its own 127-page response to his countersuit. Musk’s “claims are factually inaccurate, legally insufficient, and commercially irrelevant. We look forward to the trial in the Delaware Court of Chancery,” tweeted Twitter Chairman Bret Taylor.
Twitter argues that the two parties are using two different metrics to analyze users. “Musk is not measuring the same thing as Twitter or even using the same data as Twitter,” read the filing. The company also said that Musk is allegedly manipulating his numbers to make his case: “Musk’s ‘preliminary expert estimates’ are nothing more than the output of running the wrong data through a generic web tool. … Confirming the unreliability of Musk’s conclusion, he relies on an internet application called the ‘Botometer‘— which applies different standards than Twitter does and which earlier this year designated Musk himself as highly likely to be a bot.” The Botometer mentioned is a third-party app developed by Indiana University.
The company also notes that Musk did not mention the bot count in his July 8 letter to Twitter explaining his justification for terminating the agreement. “Musk just now invented this new pretext for avoiding the merger agreement, as these supposed inaccuracies are nowhere mentioned in his July 8 letter to Twitter explaining the bases for his purported termination of the merger agreement, nor in any other communication with Twitter since signing the merger agreement. In any event, Twitter never made the disclosures he now asserts are false,” it said.
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Twitter and Musk’s legal teams are scheduled to meet for a five-day trial from Oct. 17 to Oct. 21, where they will have an expedited trial over Twitter’s lawsuit regarding Musk’s termination of the deal. Twitter filed multiple subpoenas last weekend regarding Musk’s associates in the hope of seeking information on any communications that discussed the funding of Musk’s planned $44 billion acquisition of the company. Not all subpoenaed parties were happy with the prodding. “Twitter is subpoenaing me for tweeting, which in addition to being twisted, shows how petty and vindictive they are,” tweeted Musk associate and Callin app founder David Sacks.
Twitter continues to move forward as though the deal has been maintained. The company called for a Sept. 13 special meeting among shareholders to vote in favor of the Musk acquisition.
