SAN FRANCISCO (AFP) – Elon Musk has accused Twitter of fraud, alleging the social media platform misled him about key aspects of its business before he agreed to a USD44 billion buyout, as their court fight heats up.
The Tesla boss lodged the claim as he fights back against Twitter’s lawsuit seeking to force him to close the deal, which he has tried to cancel.
Musk argued in the filing to a Delaware court that the number of users actually shown advertising on the platform is about 65 million lower than the firm’s 238 million figure.
“Twitter’s disclosures have slowly unravelled, with Twitter frantically closing the gates on information in a desperate bid to prevent the Musk Parties from uncovering its fraud,” the claim alleged.
Musk is asking the court to free him from the agreement and make Twitter pay him an amount in damages to be determined at trial, which is set to open on October 17.
Billions of dollars are at stake, but so is the future of Twitter, which Musk has said should allow any legal speech – an absolutist position that has sparked fears the network could be used to incite violence.
In its own filing, Twitter rejected the mercurial billionaire’s argument, calling it “as implausible and contrary to fact as it sounds”.
“According to Musk, he – the billionaire founder of multiple companies, advised by Wall Street bankers and lawyers – was hoodwinked by Twitter into signing a USD44 billion merger agreement,” Twitter said.
Musk last week filed his countersuit, which was finally made public on Thursday. The entrepreneur accused Twitter of not just deceiving him, but also of lying to United States (US) market regulators.
Musk relied on Twitter’s filings to the Securities and Exchange Commission because he thought doing his own diligence – digging into the company’s value – “costly and inefficient”, his court claim said.
Analyst Dan Ives said the social media platform’s share price gave a clear idea of how investors think the fight will end.
“The countersuit Musk filed against Twitter raised some interesting points, however legally speaking the Street views this more of a sign of weakness than strength for Musk,” he told AFP.
Twitter shares closed up 3.5 per cent at USD42.52 on Friday, while Tesla shares ended down more than 6.5 per cent.
The legal fight is gathering speed as preparations have begun for the five-day trial in Delaware’s Chancery Court, which specialises in complex, high-stakes business world battles.
