Elon Musk accuses Twitter of ‘fraud’ in takeover legal battle

Multibillionaire and Tesla boss Elon Musk has accused Twitter of “fraud” in a legal battle over a $44 billion deal to buy the social network, a deal he is now trying to break.

Elon Musk says Twitter “cheated” by voluntarily increasing the number of monetized accounts, according to his arguments filed Thursday night in court and seen by AFP on Friday.

Tesla’s boss filed a complaint against Twitter in late July after the platform sued him, demanding he respect his obligation to make a purchase.

His lawyers in this 165-page document accuse Twitter of “hiding the truth” by claiming 238 million monetizable daily users, but actually 65 million fewer.

In addition, “the majority of ads” will only reach “less than 16 million users, which is a fraction” of what Twitter claims.

The complaint, which called “misrepresentations” of the social network “sins”, alleges that “Twitter desperately blocked the dissemination of information in a desperate attempt to prevent (Elon Musk) from detecting fraud.”

– Legal Battle –

Elon Musk turned to Twitter in April and then signed an agreement to buy the social network for $54.20 a share. He broke that promise unilaterally in early July, alleging that the company lied about the proportion of automated and spam accounts on its platform.

Now there is a lawsuit.

Indeed, in early July, Twitter sued Elon Musk in the Delaware Court of Chancery, a court that specializes in commercial law, to force him to keep his promise.

Two weeks later, Elon Musk counterattacked with a “confidential” complaint filed in the same jurisdiction. He asks the court to release him from the agreement and order Twitter to pay him damages.

The trial is due to begin on October 17 and will last five days.

Previously, Twitter shareholders will meet on September 13 to decide whether or not to allow this acquisition, which will represent a significant added value for shareholders.

“Musk’s Twitter counterattack raised some interesting points, but Wall Street sees it as more of a sign of weakness than strength for Musk as he heads to the Delaware court,” Wedbush Securities analyst Dan Ives told AFP.

According to him, Twitter has every chance to win the battle with the billionaire.

– “Cancellation of the contract” –

Twitter filed its response to Elon Musk’s complaint to court on Thursday. According to the document, the Tesla boss accuses the board of directors of hiding the true proportion of bad accounts, while Twitter says it is less than 5%.

The platform replies that the businessman was in a hurry to negotiate and that the agreement did not mention fake accounts.

Lawyers for the social network condemn “an attempt to evade a contract that Musk no longer finds interesting after the stock market crash.”

Due to a general downturn in the stock market in recent months, declining social media ad revenues linked to economic conditions, and public criticism from Elon Musk, Twitter shares fell to around $32 on July 11.

It was worth $42.52 on Friday, up 3.56%. The Tesla title lost 6.63% to $864.51.

Elon Musk was questioned on Thursday evening during a general meeting of shareholders of Tesla on the situation with Twitter.

Cautious, in the midst of a legal battle, the entrepreneur was content to say, “I use Twitter a lot (…) and because I understand the product very well, I have a good idea of ​​how to lead the Twitter engineering team to radically improve the product.”

But “I don’t need Twitter for this,” he added.


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