Twitter filed a detailed response to Tesla CEO Elon Musk’s countersuit against the microblogging platform, saying his claims are “factually inaccurate, legally insufficient and commercially irrelevant.”
According to Musk, he was tricked by Twitter into signing a $44 billion merger deal.
“This story is as implausible and contrary to the facts as it sounds. And it’s just that – a story, dreamed up for the purpose of escaping a merger deal that Musk no longer found appealing once the stock market – and with it, his huge personal wealth – lost value’ ‘, Twitter said in its legal response filed with the Delaware Court of Chancery in the United States.
Musk’s attorneys filed 90 pages of counterclaims in court, and Twitter responded to them paragraph by paragraph.
“Counterclaims are a tale made for litigation that is contradicted by evidence and common sense. Musk invents representations that Twitter has never made and then tries to use, selectively, the extensive confidential data that Twitter provided to him to ward off a violation of these alleged representations,’ the Parag-led company argued. Agrawal.
Yet Musk simultaneously and inconsistently claims that Twitter violated the merger agreement by blocking his requests for information, Twitter said.
Musk, in his countersuit, said his action stemmed from Twitter’s misrepresentations about the state of the business and “key metrics” Twitter uses to gauge the number of users on its platform.
“They contain numerous material misrepresentations or omissions that misrepresent the value of Twitter and caused the Musk parties to agree to acquire the company at an inflated price,” the countersuit said.
In its disclosures, Twitter claims to have nearly 238 million monetizable daily active users (mDAUs) participating in the platform, and tells its investors that this user base metric is an indicator of its ability to generate revenue. revenue and the ‘best way to measure (The success of Twitter’.
When Musk’s legal team began “peeling the onion off fake accounts and spam,” two things became abundantly clear.
“First, Twitter was misrepresenting the number of fake accounts and spam on its platform, as part of its scheme to mislead investors about the company’s prospects by focusing on its alleged hundreds of millions of mDAUs” , reads Musk’s countersuit.
Second, while Twitter has repeatedly touted mDAU as a “key metric” for revenue growth, “mDAU is not as closely tied to revenue as Twitter leads the public to believe.”
Twitter backed up its claim, saying that when Musk offered to buy Twitter, he didn’t ask for — and Twitter didn’t make — any statement about the number of fake or spam accounts.
“The merger agreement contains no reference to fake accounts or spam. Musk also did not ask Twitter for information to verify “the number of fake or spam accounts before entering into the merger agreement,” Twitter said.
Musk also attacked Twitter’s process for estimating the proportion of fake or spam accounts among monetizable daily active users as unreasonable, as Twitter’s quarterly estimates are based on daily samples of 100 mDAU, combined for a sample. total of approximately 9,000 mDAU per quarter.
“But attacking an estimate as unreliable based simply on sample size relative to population size is ‘elementary statistical error,'” Twitter said.
(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)