Twitter fooling investors over spam accounts, Musk alleges
Elon Musk has accused Twitter of deliberately miscounting the number of spam accounts on its platform as part of a “scheme” to mislead investors.
The Tesla chief executive made the allegations in a countersuit against Twitter, which is taking Musk to court in an attempt to make him complete an agreed $44bn (£36bn) takeover.
Musk repeats a claim that Twitter underplays the number of spam users on its platform as part of a “scheme to mislead investors about the company’s prospects”, according to a copy of the suit, which was unsealed yesterday. Valid user numbers are a key metric for Twitter, which makes 90% of its revenue from advertisers.
According to the Washington Post, Musk claims that Twitter has overstated the number of monetisable daily active users on the platform, or users who see ads. The number of users who see ads is 65 million lower, the lawsuit claims, and most ads are seen by fewer than 16 million users.
Musk argues that Twitter has made misrepresentations that represent a “company material adverse effect”, substantially altering Twitter’s value and therefore invalidating the deal agreement. Musk pulled out of the Twitter deal in July, citing concerns about spam accounts and how the company was being run.
Twitter’s response to the sealed Musk countersuit was published on Thursday. In it, Twitter called Musk’s arguments for abandoning the deal “a story, imagined in an effort to escape a merger agreement that Musk no longer found attractive once the stock market and along with it, his massive personal wealth, declined in value”.
“The counterclaims are a madefor-litigation tale that is contradicted by the evidence and common sense,” the response says.