In the middle of a lengthy legal dispute over a $44 billion acquisition, multibillionaire Elon Musk provoked Twitter and challenged the company’s CEO Parag Agrawal to a “public debate” over fake accounts and spam.
In April of this year, Musk submitted a bid to the Securities and Exchange to buy Twitter. After the companies decided to proceed with a take-private transaction, Musk announced he was cancelling his acquisition of Twitter and accused the social network of providing false information, including in its SEC filings, about the number of monetizable daily active users and the number of spam and bot accounts.
In order to ensure that the purchase would go through as planned, Twitter then sued Musk in Delaware chancery court. On July 29, Musk responded with counterclaims and a countersuit in that court.
Just before one in the morning on Saturday, August 6, Musk started tweeting in response to a fan who had summed up his criticisms of Twitter, including that it was refusing to answer his questions and providing him with “outdated data” and “a fake data set” when he requested information about how it calculates mDAU and estimates for spam and bot accounts.
The CEO of Tesla and SpaceX wrote: “Good summary of the problem. If Twitter simply provides their method of sampling 100 accounts and how they’re confirmed to be real, the deal should proceed on original terms. However, if it turns out that their SEC filings are materially false, then it should not.”
Less than 5% of Twitter daily users are fake/spam— Elon Musk (@elonmusk) August 6, 2022
On Saturday morning, shortly after 9 a.m., Musk launched a Twitter poll asking his followers whether “[l]ess than 5% of Twitter daily users are fake/spam.” The informal poll’s respondents could select one of Musk’s responses, which read “Yes” followed by three robot emoji or “Lmaoo no.”
Also on Saturday morning, Musk wrote: “I hereby challenge @paraga to a public debate about the Twitter bot percentage. Let him prove to the public that Twitter has <5% fake or spam daily users!”
I hereby challenge @paraga to a public debate about the Twitter bot percentage.— Elon Musk (@elonmusk) August 6, 2022
Let him prove to the public that Twitter has <5% fake or spam daily users!
According to a company insider, no discussion will take place while a trial is still ongoing.
On Saturday, calls for comments from Musk’s lawyers went unanswered, and a Twitter lawyer declined to address Musk’s tweets from that day.
In court documents, Twitter’s lawyers have contended that Musk gave the company only twenty-four hours to accept his offer before he would bring it straight to Twitter shareholders, and that by doing so, he waived due diligence, including the opportunity to find out more about phoney or spam accounts.
In court documents, they stated, “Musk’s repeated mischaracterizations of the merger agreement cannot change its plain words.”
On August 4, Musk was asked about Twitter during a Q&A session that followed a proxy vote at a Tesla annual shareholder meeting.
The audience members present laughed as he said, “I obviously have to be a little careful what I say about Twitter because there’s this lawsuit and stuff.” He acknowledged that Tesla and Twitter are the only two publicly traded securities he owns.
Then, in a sharp contrast to arguments made by Musk via his attorneys in legal filings in Delaware, where Musk claims he shouldn’t be required to complete the acquisition, he continued to speak as if he still wanted to become the owner of the social networking business.
Musk mentioned the following at the Tesla 2022 shareholders meeting: “I think in the case of Twitter since I use it a lot, shoot myself in the foot a lot, you know, dig my grave, etc. I think it’s — I do understand the product quite well, so I think I’ve got a good sense of where to point the engineering team at Twitter to make it radically better.”
Twitter, he continued, would “help accelerate” a “pretty grand vision” he had for X.com or X Corporation, a company he had been considering since his early days as a digital entrepreneur.
“Obviously that could be started from scratch,” he said, “but I think Twitter would help accelerate that by three to five years. So it’s kind of like something I’ve thought would be quite useful for a long time. I know what to do. Don’t have to have Twitter for that but, like I said, it’s probably at least a three-year accelerant and I think it’s something that will be very useful to the world.”
At that meeting, Musk didn’t provide any additional information. He reportedly stated, however, that he wanted to increase Twitter’s user base to one billion people during a town hall meeting with Twitter employees in June of this year. He also reportedly stated that he thought Twitter had the potential to develop into a “super app,” similar to China’s WeChat, which combines messaging, video, social media, mobile payments, and point-of-sale functionality.
Twitter and Musk are scheduled to go to court in Delaware on October 17 for a five-day trial, unless they first strike a deal. Judge Kathaleen St. J. McCormick is assigned to this case.