Court caseElon Musk accuses Twitter of ‘hiding the truth’ and ‘fraud’
A legal battle has been waged between Elon Musk and Twitter since the richest man in the world broke the agreement on the takeover of the social network.
Multi-billionaire and Tesla boss Elon Musk accuses Twitter of “fraud” in the legal battle over the deal to buy the social network for $ 44 billion, an agreement he is now seeking to break.
Elon Musk assures that Twitter has “frauded”, by voluntarily increasing the number of monetizable accounts, according to his arguments filed Thursday evening in court, and consulted Friday by AFP. The boss of Tesla had filed a complaint against Twitter at the end of July, after being himself sued by the platform, which wants him to respect his commitment to purchase.
His lawyers, in this 165-page document, accuse Twitter of having “hidden the truth”, claiming 238 million monetizable daily users, but there are actually 65 million fewer. In addition, “the majority of advertisements” would only be broadcast to “less than 16 million users, a fraction” of what Twitter claims.
The complaint, which calls “misrepresentations” of the social network a “sin”, claims that “Twitter frantically blocked information from circulating in a desperate attempt to prevent (Elon Musk) from discovering the fraud”.
Elon Musk approached Twitter in April and then signed an agreement to buy the social network for $54.20 per share. He broke that pledge unilaterally in early July, arguing that the company lied about the proportion of automated and spam accounts on its platform. A legal battle is now underway.
Indeed, Twitter in early July sued Elon Musk before the Delaware Court of Chancery, a court specializing in business law, to force him to honor his promise. Two weeks later, Elon Musk counterattacked with a “confidential” complaint filed in the same court. He asks the court to release him from the agreement and order Twitter to pay him damages.
A trial is due to open on October 17 and last five days. Previously, the shareholders of Twitter will meet on September 13 to authorize or not this acquisition, which would represent a substantial added value for the shareholders.
“Musk’s counterattack on Twitter has raised some interesting points, but Wall Street sees it as a sign of weakness rather than strength for Musk as he heads to Delaware courts,” the analyst told AFP. Dan Ives of Wedbush Securities. According to him, Twitter is in a good position to win the battle against the billionaire.
“Escaping a contract”
Twitter filed its response to Elon Musk’s complaint in court on Thursday. According to this document, the boss of Tesla accuses the board of directors of having concealed the true proportion of inauthentic accounts, when Twitter assures that it is less than 5%. The platform replies that the businessman rushed the negotiations and that the agreement never mentioned the fake accounts.
Lawyers for the social network 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, the decline in social media advertising revenue linked to economic conditions and public criticism from Elon Musk, Twitter’s stock had collapsed to around $32 on July 11.
It was worth Friday at the close of 42.52 dollars, up 3.56%. The title of Tesla lost 6.63% to 864.51 dollars. Elon Musk was questioned Thursday evening during the general meeting of shareholders of Tesla on the situation with Twitter.
Cautious, while he is in the middle of a legal tussle, the entrepreneur was content to affirm: “I use Twitter a lot (…) and as I understand this product very well, I have a good idea of how to guide the engineering team at Twitter to make the product radically better. But “I don’t need to have Twitter for that,” he added.
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