Businessman Elon Musk has accused Twitter of fraud in a countersuit for his frustrated deal to buy for $44 trillion the social network which it claims failed to disclose the information needed to complete the deal and misled its legal team about the true size of its user base.
The billionaire and Tesla CEO’s countersuit alleges that Twitter committed fraud, breach of contract and violation of a securities law in Texas, where Musk lives.
The lawsuit was filed confidentially last week and released Thursday evening by the Delaware Court of Chancery.
Musk offered to buy Twitter earlier this year, but then tried to back down claiming the social network had more bots and fake accounts from what the tech company originally said.
Twitter sued him to coerce him into completing the buyout dealbut Musk responded by filing a counterclaim.
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Musk’s attorneys argue in the countersuit that Twitter’s “misrepresentations or omissions” distorted the value of the company and caused Musk to agree in April to buy it at an inflated price. Additionally, they allege that Twitter’s own statements revealed that it has 65 million fewer “monetizable daily active users” who can receive digital ads than the 238 million claimed by Twitter.
Court documents also point out that most Twitter ads are only shown to a portion of the company’s user base.
Musk’s legal team also accuses Twitter of making too many major changes in recent months without consulting him, including personnel decisions and allegedly flouting social media restrictions imposed by the Indian government, which is the third largest market in the country since Twitter.
Musk had pledged to make Twitter a haven for free speech, but also said he had to comply with local laws where he operates.
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Twitter replied that the information provided to the Securities and Exchange Commission (SEC) is accurate and that the company “has not misrepresented anything”, as stated. BNC News.
The claim that Musk was ‘tricked’ into signing the deal is ‘as implausible and contrary to the facts as it seems’, he said, pointing out that Musk finds excuses to evade the deal .
The social network also disputed Musk’s claims about fake accounts, saying the proposed analysis was based on “a generic web tool” that flagged the billionaire’s own Twitter account as a likely bot.
The Delaware court, which handles large-scale disputes between companies incorporated there, such as Twitter, will rule on the case from October 17.