News

Elon Musk alleges fraud in counterclaim. Twitter says he wasn’t “betrayed” in the merger.

blank

Elon Musk’s lawyers allege in a recently filed filing that Twitter misrepresented information about the company and its “key metrics” and distorted its value in order to trick the billionaire into buying the social media platform at an inflated price agree.

The allegations were detailed in a counterclaim released Thursday in a Delaware Chancery Court. The countersuit alleges fraud, alleging that Twitter made statements in its Securities and Exchange Commission filings that are “far from true” and that “contain numerous material misstatements or omissions that misrepresent Twitter’s worth.”

Twitter said in its response that its SEC disclosures were accurate and that the company “didn’t misrepresent anything.”

Claiming that Musk was “tricked” into signing the merger is “as implausible and contradictory as it sounds,” Twitter said, claiming that Musk is making up excuses to avoid the deal.

Twitter sued Musk last month after Musk tried to pull out of a deal to buy the company for $54.20 a share, or $44 billion, and take it private. Since Musk made his initial bid for Twitter in April, the social media platform’s share price has fallen to $41, leading some, including Twitter itself, to speculate that Musk is simply seeking a lower price for the company.

Musk, in turn, has accused Twitter of withholding data on the volume of fake and spam accounts on its site, arguing the company misled investors about how many active users it really has. Much of the counterclaim focuses on these accounts and active user counts.

Twitter has responded to these claims in the past by saying it gave Musk all the information he asked for.

Now Twitter is going to court to force Musk to go through with the sale.

That’s among the many twists and turns Musk’s bid for the company has taken over the past four months.

It all started when Musk became Twitter’s largest public shareholder in April, declaring ownership of more than 9% of the company’s stock.

Musk initially wanted a seat on Twitter’s board of directors in connection with his involvement. Eventually that changed and he made an offer to buy Twitter outright.

“I invested in Twitter because I believe in its potential to be the platform for free speech around the world,” Musk said in an April 14 letter to Twitter CEO Bret Taylor. “In my opinion, freedom of expression is a social imperative for a functioning democracy.”

Twitter’s initial response to the offer was to introduce a so-called poison pill provision that would have created more shares in the company to dilute the value of Musk’s holdings.

But by the end of the month, Musk had made his 11-figure bid to buy Twitter, and the social media company reversed course, deciding that Musk’s $44 billion valuation of the company was the best price its shareholders could get would. On April 25, it accepted Musk’s offer.

By May, Musk said he put the deal on hold in response to what he said were problems with the number of fake and spam accounts on the site. Twitter had long stated in official filings that it believed no more than 5% of the accounts on its site fell into this category — raising questions about Musk’s true motivations behind his apparent back down.

Between the time Musk made his offer of $54.20 per share and his claim that he would pause the deal, Twitter’s share price had fallen as low as $45.

However, Musk and Twitter failed to come to an agreement to settle the dispute, leading to the current impasse. Now, lawyers for Twitter and Musk have set an October hearing to hear the dispute in the Delaware Chancery Court, the main jurisdiction in the United States for settling business matters.

Claire Cardona contributed.

https://www.nbcnews.com/business/business-news/elon-musk-claims-fraud-countersuit-twitter-says-was-not-hoodwinked-mer-rcna41562 Elon Musk alleges fraud in counterclaim. Twitter says he wasn’t “betrayed” in the merger.

Fry Electronics Team

Fry Electronics.com is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@fry-electronics.com. The content will be deleted within 24 hours.

Related Articles

Back to top button