Musk accuses Twitter of fraud as $44B buyout battle escalates

The richest man in the world is asking the court to free him from the agreement and make Twitter pay him an amount in damages to be determined at trial.

Elon Musk has accused Twitter of fraud, alleging the social media platform misled him about key aspects of its business before he agreed to a $44 billion buyout, as their court fight heats up.

The Tesla boss lodged the claim on late Thursday as he fights back against Twitter’s lawsuit seeking to force him to close the deal, which he has tried to cancel.

Musk argued in the filing to a Delaware court that the number of users actually shown advertising on the platform is about 65 million lower below the firm’s 238 million figure.

“Twitter’s disclosures have slowly unraveled, with Twitter frantically closing the gates on information in a desperate bid to prevent the Musk Parties from uncovering its fraud,” the claim alleged.

Musk last week filed his countersuit, which was finally made public on Thursday, along with a legal defence against Twitter’s claim that he is contractually bound to complete the takeover deal.

The entrepreneur accused Twitter of not just deceiving him, but also of lying to US market regulators. He is asking the court to free him from the agreement and make Twitter pay him an amount in damages to be determined at trial, which set to open on October 17.

Billions of dollars are at stake, but so is the future of Twitter, which Musk has said should allow any legal speech — an absolutist position that has sparked fears the network could be used to incite violence.

‘Twitter has complied in every respect’

In its own filing, Twitter rejected the mercurial billionaire’s argument, calling it “as implausible and contrary to fact as it sounds.”

The legal battle flows from Musk wooing Twitter’s board with a $54.20 per-share offer in April, but then in July announcing he was terminating their agreement because the firm had misled him regarding its tally of fake and spam accounts.

Twitter, whose shares were up about 3.5 percent to $42.51 on Friday, has stuck by its estimates that less than five percent of the activity on the platform is due to software “bots” rather than people.

The social media platform told the court that Musk’s claim that the false account figure tops 10 percent is “untenable.”

Twitter also disputed Musk’s assertion he has the right to walk away if its bot count is found to be wrong, since he didn’t seek information on that topic when he made the buyout offer.

“Twitter has complied in every respect with the merger agreement,” the company said in the filing made to Chancery Court, accusing Musk of contriving a story to escape a merger agreement that he no longer found attractive.

“Musk’s counterclaims, based as they are on distortion, misrepresentation, and outright deception, change nothing,” Twitter added. The social media platform has urged shareholders to endorse the deal, setting a vote on the merger for September 13.

Source: TRT


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