Highlight
- Elon Musk accused of fraud on Twitter in a countersuit over his canceled $44 billion deal
- Musk accuses Twitter of fraud, breach of contract, violating Texas Securities Act
- Twitter sued them to force them to complete the acquisition. Musk responded by filing a countersuit
Elon Musk accused Twitter of fraud in a countersuit over a canceled $44 billion deal for the social media company, which he said withdrew essential information and misled his team about its actual user base.
The counterclaim by the billionaire and Tesla CEO alleges that Twitter committed fraud, breach of contract and violated the Texas Securities Act.
Musk’s counterclaims were filed confidentially last week and were closed in a filing late Thursday in Delaware Chancery Court.
Musk offered to buy Twitter earlier this year, then tried to back out of the deal, claiming that Twitter was affected by more “spam bots” and fake accounts than it had disclosed.
Twitter sued them to force them to complete the acquisition. Musk responded by filing his countersuit.
Musk’s lawyers argued that Twitter’s “misrepresentation or omission” distorted the value of Twitter and caused Musk to agree to buy it at an inflated price. He said Twitter’s own disclosures showed that there are 65 million fewer “monetable daily active users” than Twitter claims of 238 million who can be shown digital ads.
The filing also said that most of Twitter’s ads are only shown to a different segment of the company’s user base.
In an unexpected twist, before Musk’s own counterargument surfaced, Twitter recorded its response denying Musk’s allegations.
Twitter called Musk’s argument “a story, conceived in an attempt to avoid a merger agreement that Musk no longer found attractive.”
The matter is to be heard on October 17.