Saturday, July 9, 2022

Elon Musk Tries to Wriggle Out of Twitter Deal

But Musk still wanted more. In particular, he wanted the company’s internal metrics, materials for board members, and the formula for measuring the mDAUs, as his lawyers wrote in today’s letter. Apparently, the Twitter board gave Musk a dataset that capped how many queries he would be able to make into it and had more restrictions on how the data could be parsed than comparable customer information. (After Musk complained, they apparently fixed the problem.) This is pretty wild since Musk has been obviously trying to get out of the deal and has used Twitter’s unresponsiveness to his requests as a legal cudgel before.

Now, Musk is coming out hard against Twitter based on the analysis he was able to do, and he essentially called the board members liars about the number of fake accounts that pervade the platform. “While this analysis remains ongoing, all indications suggest that several of Twitter’s public disclosures regarding its mDAUs are either false or materially misleading,” according to Mike Ringler, Musks’s lawyer at Skadden, Arps, Slate, Meagher & Flom. Specifically, Musk and his team believe that the number of spambots in the mDAU calculation is “wildly higher” than 5 percent and that — and this could be the most damning revelation — Twitter knowingly counts suspended accounts among those users. For its part, the company says it will see Musk in court. “The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery,” chairman Bret Taylor tweeted in response.



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