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Elon Musk's counterclaim against Twitter says it misled him

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  • Elon Musk has filed a counterclaim against Twitter containing allegations of user metrics.
  • He accused the company of trying to “distract” from what it called many “misrepresentations.”
  • Twitter responded by calling the billionaire’s story “unbelievable and untrue.”

Elon Musk’s secretly filed 164-page counterclaim against Twitter is filled with accusations about the validity of the social media company’s business claims.

An insider got a copy of the counterclaim, which is another escalation in the legal battle over Musk’s attempt to cancel the deal that bought Twitter for $44 billion. , which will face off in October in a Delaware court over whether he can legally walk out of the deal to acquire the platform.

In a counterargument, Musk makes lengthy claims that it has the right to withdraw from the deal. He says Twitter’s public assurances to investors have led him to believe that the company’s business, built on user metrics, is healthy. For months, Musk has publicly claimed that he has more spam accounts, known as bots, than Twitter admits. After asking for more information on the matter, he tried to call off his deal in early July.

Now he accuses the company of intentionally “miscalculating” the number of spam accounts it hosts to increase user metrics as part of a “plan to mislead investors about the company’s prospects.” He also explains that Twitter’s reliance on the metric mDAU (monetizable daily active Twitter users) as a basis for revenue is misleading. At the same time, Musk claims that his daily user count on Twitter is actually 65 million less than he is. According to him, only 16 million users see ads and should be considered “monetizable.”

His counterargument also said that Twitter’s lawsuit to enforce the merger agreement was “rife with personal attacks on Musk and flamboyant rhetoric directed at media audiences more than this court,” adding that “these misconduct It’s just an attempt to distract from the display.”

“It’s been Twitter’s strategy all along: to distract and obfuscate the truth about its disclosures, first from investors and then from the Musk Party, which has begun to discern the truth,” the allegation continues.

Twitter responded to Musk’s accusations. It filed a response in court after hours, and the billionaire’s allegations were “a story concocted to escape a merger deal that Musk no longer found appealing after the stock market and his vast personal fortune dwindled.” ‘ said. by value. ”

“Counterclaims are narratives made for lawsuits that contradict evidence and common sense,” Twitter added.

Musk’s counterclaim was initially withheld from the public because Twitter’s attorneys claimed it contained non-public information about the company that needed redaction. After days of back and forth between attorneys for both sides, the judge overseeing the case at Chancery Court in Delaware said the case had to go public by Friday.

Musk faces an uphill battle in an effort to back out of the deal given the ironclad deal he signed earlier this year.

But his counterclaim is an attempt to make a way out of the deal. Twitter has repeatedly pointed out that Musk waived its right to information before signing the merger agreement, but Musk said it was going the traditional route of “trust but verify.” . Right to do so.

According to the lawsuit, Mr. Musk’s team “fully anticipated that Twitter would hide nothing from its would-be owners, including the extent of the problem of fake and spam accounts.”

“Instead, the opposite happened,” he continued. “Twitter played months of games of hide-and-seek trying to run out the clock before the Musk faction could discern the truth about these expressions. They had to close it. The more Twitter sidestepped even simple inquiries, the more the Musk party became suspicious that Twitter had misled them.”

Musk accused the company of deliberately misleading him. The counterclaims allege that the platform’s user authentication process is weak and that the company does not send users emails, texts, or other push notifications to verify their identity. Parag Agrawal also said he was unable to explain to Musk how he chose accounts to be managed by human moderators.

Twitter gave Musk a ton of information about accounts and users. Musk’s claim calls it “limited,” but goes on to say that the analysis so far has yielded “shocking results.” For example, a review conducted by Musk’s experts in early July concluded that “one-third of the accounts you see may be fake accounts or spam his accounts.” . For him, this means that the “conservative lower bound” for spam accounts on the platform is his 10%, not his 5% that Twitter officially states.

Musk claims this, coupled with Twitter’s claim that mDAU is much lower than it says, means he has the right to terminate his deal to acquire the company. Musk has asked the court to rescind the merger agreement and to award undisclosed compensatory damages.

Are you a Twitter employee or have an insight to share? Contact Kali Hays at, use the secure messaging app Signal at 949-280-0267, or @ Get in touch using Twitter DM at hayskali. Communicate using non-work devices.