Science

Number of monetized accounts | Elon Musk accuses Twitter of fraud

(San Francisco) Multibillionaire and Tesla boss Elon Musk is accusing Twitter of “fraud” in a $44 billion legal battle over the social network’s $44 billion purchase deal, which he is now seeking to derail.

Posted at 12:12
Updated at 18:06.

Glenn CHAPMAN
French media agency

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 “masking the truth” by claiming 238 million monetizable daily users, when the reality is 65 million fewer.

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

The lawsuit, which called the social network’s “misleading representations” “sins,” says “Twitter feverishly blocked the spread of information in a desperate attempt to prevent [Elon Musk] to uncover fraud.

Judicial 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 has raised some interesting questions, but Wall Street sees it as more of a sign of weakness than strength for Musk as he heads into the Delaware courts,” said Dan Ives, an analyst at Wedbush Securities.

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

“Escape from 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 while he is in the midst of a legal battle, the entrepreneur was content to confirm: “I use Twitter a lot. […] and since I am very knowledgeable about this product, I have a good idea of ​​how to send the engineering team to Twitter to make the product radically better.”

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

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