For the first time today, representatives for Elon Musk and Twitter faced off in court. So far, Twitter has a leg up.
As Twitter sues Musk to force him to close his $44 billion acquisition, the company wanted to fast-track the trial to take place in September over four days. But the SpaceX and Tesla CEO wanted to wait until February for a ten-day trial, saying that it would be unfair to go to court so soon. Today, Judge Kathaleen McCormick ruled that the Twitter v. Musk showdown will be expedited and take place in October, rather than in February. However, the court thinks that the case should be tried over five days, which is slightly longer than Twitter's proposal.
This isn't quite as early as Twitter wanted to go to court, but the ruling still favors the company over its presumptive buyer.
In a filing yesterday, Twitter argued that the company is harmed each day that its dispute with Musk continues, so the case needs to be tried as soon as possible. The company also stated that Musk's proposed schedule, slating the trial for February, was “calculated to complicate and obfuscate.”
“Millions of Twitter shares trade daily under a cloud of Musk-created doubt,” Twitter wrote. “No public company of this size has ever had to bear these uncertainties.”
At the hearing, Musk's lawyers argued that they need more time to investigate the “firehose” of data that Twitter provided in an attempt to confirm its estimates that less than 5% of monetizable daily active users (mDAUs) are bots. Apparently, Musk's team is running millions of searches on this data to better understand the platform's calculations, which have appeared in SEC filings consistently since the company went public in 2013.
Though Musk's team stays true to its assertion that Twitter is lying about how many bots are on the platform, Twitter believes that the real issue at play is the macroeconomic downturn.
“In his press release announcing the deal on April 25, 2022, Musk raised a clarion call to ‘defeat the spam bots.’ But when the market declined and the fixed-price deal became less attractive, Musk shifted his narrative, suddenly demanding ‘verification’ that spam was not a serious problem on Twitter’s platform, and claiming a burning need to conduct ‘diligence’ he had expressly forsworn,” Twitter wrote in its lawsuit against Musk.
Yet Musk's team argued that it doesn't make sense for the mogul to drive down Twitter's stock price, since he is presently the company's second-largest shareholder. However, he has publicly used his Twitter account to urge the SEC to investigate the company.
With so much drama and dispute, it might seem nonsensical for Twitter to force Musk into buying a company that he is acting quite hostile toward. Yet the fact remains that Musk's signed offer remains far too appealing to turn down. While Twitter shares are trading around $40 at the time of publication, Musk's offer values the company at $54.20 a share.
This story is developing…