The Tesla CEO signed a deal at the end of April to acquire the company for $44 billion (42 billion euros), but came back to it in early July. Twitter then sued him, in an attempt to let the takeover go ahead.
It was briefly unclear what exactly the case that Musk himself then started against Twitter was about. The reason now turns out to be what Musk cited when he torpedoed the Twitter deal: he believes Twitter lied about the number of fake accounts that exist on the site.
Musk says his team’s research shows that about 10 percent of all Twitter users are fake. Twitter, on the other hand, says it’s less than 5 percent of all accounts.
In addition, Twitter would keep the number of users who actually see advertising on the site a secret, Musk now believes in the court documents. He says 65 of the 229 million daily users don’t see ads.
“With this misrepresentation, Twitter hid major weaknesses in its business plan,” Musk’s attorneys said. “As a result, Musk was misled into buying Twitter at too high a price.”
‘Unbelievable and contrary to the facts’
In a reaction Twitter lawyers write that “Musk’s story is as implausible and factual as it sounds”. They accuse Musk of making up lies so that he can get out of his takeover bid, at a time when his company’s stock prices fell and the takeover was no longer attractive.
Twitter points out that Musk made no attempt at all in his takeover bid to request information about fake accounts. “The acquisition contract does not mention fake accounts anywhere. In fact, Musk “waived a preliminary due diligence and gave the board of Twitter only 24 hours to decide on his offer”.
The two parties will meet in court for the first time in October.