Twitter has filed a legal response denying Elon Musk's counterclaims about the company he's supposed to acquire — a deal he's trying to exit by claiming Twitter fraudulently misrepresented the number of fake accounts on the platform. The 127-page document sees Twitter refuting Musk's various claims, saying that they are “a made-for-litigation tale that is contradicted by the evidence and common sense.” Ouch!
The social network noted in the filing that these counterclaims “fail to justify Musk’s plan to dishonor the merger agreement,” and accused them of being an effort to escape the agreement because of the market downturn.
“According to Musk, he — the billionaire founder of multiple companies, advised by Wall Street bankers and lawyers — was hoodwinked by Twitter into signing a $44 billion merger agreement. That story is as implausible and contrary to fact as it sounds,” snarked Twitter, in the filing made public on Thursday.
Twitter's chairman Brett Taylor also posted to the social network, criticizing Musk's claims as being “factually inaccurate, legally insufficient, and commercially irrelevant.”
Musk's lawyers had filed 90 pages of counterclaims in the Delaware Court of Chancery and Twitter's response tackles them paragraph by paragraph.
The social network's lawyers pointed out that Musk has misunderstood many Twitter metrics, for starters. For example, he confused monetizable daily users with monetized daily users. The former is a metric that Twitter regularly uses to measure its growth in its quarterly earnings report.
“…mDAU represents an opportunity to monetize those users, rather than a confirmation that each user has generated ad revenue on any given day,” Twitter explained.
The Twitter response is full of arch legal repartee, trying to show that Musk's claims are ridiculous.
So expect sentences like: “To the extent Paragraph 7 contains allegations about Musk’s ‘thesis,' Twitter lacks knowledge or information sufficient to form a belief as to the truth of the facts alleged and denies them on that basis.“
This was said in response to Musk's accusation of spam accounts having a big effect on public discourse.
“Musk invents representations Twitter never made and then tries to wield, selectively, the extensive confidential data Twitter provided him to conjure a breach of those purported representations, Twitter writes. “Yet Musk simultaneously and incoherently asserts that Twitter breached the merger agreement by stonewalling his information requests.”
Twitter's filing comes amid a series of legal steps by both sides like a game of legislative tennis.
After Twitter sued Musk last month, a Delaware judge placed the trial to take place on October 17. Days after that, Musk countersued the social network and the documents of the case were placed under a seal. In response, Twitter subpoenaed Musk's associates including Peter Theil's VC firm Founders Fund and investors Joe Lonsdale and David Sacks. In retaliation, the Tesla CEO's lawyers subpoenaed JPMorgan Chase and Goldman Sachs — firms that advised Twitter on the acquisition deals.
Musk had agreed to buy Twitter for $54.20 per share in a $44 billion deal, but the stock has dropped significantly since the agreement was signed — dropping to $32.65 in July. Today, Twitter is trading at $41.77.