On the day Twitter accepted a $44 billion offer in April, former CEO Jack Dorsey called Elon Musk an “exceptional decision I trust” for the company’s future.
The endorsement could come back to haunt Dorsey after Musk called him on Monday to try to get out of the deal. The request for documents and communications related to the number of fake accounts on the platform is intended to reinforce Musk’s arguments at the heart of the legal duel that he should not complete the acquisition he proposed because Twitter misrepresented user data.
Dorsey resigned in November as head of the company he founded, as he faced mounting phone calls and criticism from Republican lawmakers who complained about the suppression of conservative voices on social media. He supported Musk’s purchase of Twitter, noting that the “Tesla tycoon’s goal to create a platform that is as reliable and comprehensive as possible is right.”
In the call, Musk asked for information about the merger in January 2019. He is primarily looking for documents that “show, relate to, or relate to the impact of fake or spam accounts on Twitter’s business and operations.” This includes communications that describe business plans for meeting daily goals for active users, how Twitter calculates metrics, and whether the company uses other metrics.
In the appeal, Musk alleges that Twitter committed fraud by violating its efforts, violating the merger agreement, to verify the company’s estimate that fake accounts account for less than 5% of its daily monetized active users. He claims he relied on the alleged misrepresentation when he agreed to buy Twitter and asked the Securities and Exchange Commission to investigate the company over the matter.
Twitter insists its SEC filings were correct and that Musk is looking for an excuse to back out of the deal.
As part of the subpoena, Musk is seeking Dorsey’s opinion on how Twitter detects fake accounts and whether the number of daily active users affects his pay. He also announced the retirement of Kevon Bakepour, Twitter’s former head of consumer products, and Bruce Falk, former head of product revenue.
The five-day trial, scheduled to begin on October 17, is heating up quickly. Delaware Court of Chancery Judge Kathleen St. J. McCormick, ordered Twitter on August 15 to produce Beykpour documents about spam accounts and bots. He refused to force the company to hand over the files of 21 other people Musk says were key witnesses in the fake account case. In presentations this month, Musk accused Twitter of withholding the names of executives with knowledge of the matter.
Both sides appealed to investment firms, banks and enforcement agencies for information and communications about the deal. The list includes Silicon Valley venture capitalists Chamath Palihapitia, David Sachs, Steve Jurvetson, Marc Andreessen, Jason Kalakanis and Keith Rabois, among others.
Source: Hollywood Reporter
Camila Luna is a writer at Gossipify, where she covers the latest movies and television series. With a passion for all things entertainment, Camila brings her unique perspective to her writing and offers readers an inside look at the industry. Camila is a graduate from the University of California, Los Angeles (UCLA) with a degree in English and is also a avid movie watcher.
