In a court filing, Twitter called Musk’s reasoning “a story, concocted in an attempt to escape a merger deal that Musk no longer found attractive.”
SAN FRANCISCO – Twitter denied in a court filing that it deprived its potential buyer, billionaire and Tesla CEO Elon Musk, of necessary information or misrepresented details about his business. Musk initially made those allegations to justify his attempt to back out of a $44 billion deal to buy the social platform, which he later claimed was infected with a much larger number of ” spam bots” and fake accounts than Twitter had discovered.
The fate of that acquisition, which Musk agreed to without taking time to review the details of Twitter’s business, now rests with a Delaware court where Twitter sued to force Musk to end the deal. The case is scheduled to go to trial on October 17.
The court’s decision could ultimately determine the future of a social platform used daily by 238 million people around the globe — a small audience by the standards of Facebook and other major platforms, but one that includes political leaders, big entertainers and experts in a variety of subjects. Until January 2021, it was also the home of then US President Donald Trump.
In an unexpected twist, Twitter was able to deliver its response to Musk before Musk’s own counterclaims became public. A judge ruled Wednesday that Musk’s counterclaim will be made public by Friday.
However, parts of Musk’s counterclaim were included in the Twitter response. These include accusing the company of fraud and “delay tactics” and only providing Musk with “sanitized, incomplete information” in response to his questions about spam accounts and other company metrics. While Twitter has alleged that Musk is making up reasons to walk away from buying the company, Musk’s lawyers say Twitter is the one holding up the deal by “dragging its feet” and providing insufficient data on the billionaire’s demands.
In a response filed Thursday in the Delaware Court of Chancery, Twitter called Musk’s reasoning “a story, concocted in an attempt to escape a merger deal that Musk no longer found attractive.”
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“Counterclaims are a made-up story for litigation that is contradicted by evidence and common sense,” said Twitter’s response. “Musk invents representations that Twitter never made and then tries to use, selectively, the extensive confidential data that Twitter provided him to conjure up a violation of those alleged representations.”
At the same time, the response said, Musk also accused Twitter of violating their agreement by “dragging” his requests for information.
Representatives for Musk did not immediately return a message for comment Thursday, though Musk spoke briefly on Twitter at Tesla’s annual shareholder meeting Thursday.
He told an audience at Tesla’s factory near Austin, Texas, that Twitter fits the grand vision for his holding company. He said that since he uses Twitter a lot, with more than 100 million followers, he knows what to do with it.
“I understand the product pretty well,” he said. “So I think I have a good sense of where to direct the engineering team at Twitter to make it fundamentally better,” he said.
Musk’s lawyers had wanted to file a public version of their answer and counterclaims in the Delaware court on Wednesday. But Twitter’s lawyers complained they needed more time to review and potentially redact Musk’s sealed filing, saying it refers “extensively” to internal Twitter information and data Musk was given.
Musk, the world’s richest man, agreed in April to buy Twitter and take it private, offering $54.20 a share and pledging to loosen the company’s control over content and root out fake accounts. Among other things, Musk said he would reinstate Trump — who was banned from Twitter following the January 6, 2021 riots at the US Capitol — on the platform.
But Musk said in July he wanted out of the deal, prompting Twitter to file a lawsuit to keep him in the “seller-friendly” arrangement.
Musk says Twitter has failed to provide him with enough information about the number of fake accounts on its service. Twitter argues that Musk, CEO of electric car maker and solar energy company Tesla Inc., is deliberately trying to cancel the deal because market conditions have worsened and the acquisition no longer serves his interests.
Either Musk or Twitter will be entitled to a $1 billion breakup fee if the other party is found liable for the deal’s failure. Twitter wants more, however, and is seeking a court order for “specific performance” ordering Musk to follow through on the deal.
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