Elon Musk Says Twitter Is Hiding Witnesses The Daily Financial Trends

Elon Musk

Elon Musk has told the court hearing Twitter’s lawsuit against him that Twitter is hiding key witnesses in their legal battle, which he will need to call to prove he should be released from the $44 billion buyout deal.

Musk is maintaining that Twitter has expressly refused to identify the employees who it assigned to evaluate how much of Twitter’s user base is made up of spam and bot accounts, according to sources which chose to remain anonymous, because they were not cleared to speak on the matter.

Musk’s lawyers have asked the judge to direct Twitter to identify the workers so the defense can subpoena their records and begin questioning them.

Musk’s lawyer filed the request Tuesday, in a letter to Delaware Chancery Court Judge Kathleen St. J. McCormick. Twitter’s lawyers will be given five days to decide what should be redacted from the filing as proprietary information under the business court’s rules.

A Twitter spokesman decline to comment on the report.

The filing comes on the heels of news the Tesla CEO has sold $6.9 billion of Tesla shares, so that if he were forced by the court to follow through on the buyout, he would not be forced to liquidate the position under duress in a fire-sale.

However some analysts have speculated he may have liquidated the position because he is preparing to settle the Twitter suit for a lower price than the agreed-upon $54.20 per share price of the social media giant.

According to the sources, so far Twitter has relinquished the names of “records custodians,” who have limited familiarity with the data in question, and were not involved in producing it. Musk wants the names of specific employees who were assigned to monitor the sampled accounts which twitter analyzed, in coming to their final calculation of how many users were actual monetizable people, and how many were spam and bot accounts.

Both sides have been issuing floods of subpoenas to banks, lawyers, and investors who are involved in the purchase as the October 17th trial date approaches.

Carl Tobias, a University of Richmond law professor who specializes in acquisition law said, “It’s another salvo in the discovery wars that are common in this kind of litigation. Both sides are jockeying for position by targeting different information.”

Twitter’s lawyers say they will only need four days to prove Musk is falsely trying to exploit questions about bot and spam accounts to walk away from a contractual agreement. Twitter’s position is it has surrendered all the information Musk needed, and he should be forced to follow through on his agreed-upon purchase of all outstanding shares for $54.20 per share.

Musk’s position is Twitter has lied about the number of bot and spam accounts, and refused to provide him with the data required to prove their assertions. He argues that since the company does not have the number of monetizable active daily users it claimed when they inked the deal, he should not be forced to follow through on the purchase.

In his response, Musk claims that the actual number of monetizable daily active users, or mDAU in Twitter’s parlance is actually a full 65 million less than the 238 million Twitter represented when he signed the contract. He further maintains that the social media giant misrepresented how many of the remaining users view advertising. By Musk’s calculations only about 16 million users who visit the site daily actually see ads, which is far fewer than the 238 million Twitter represented.

The Daily Financial Trends

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About Stu Turley 2009 Articles
Stuart Turley is President and CEO of Sandstone Group, a top energy data, and finance consultancy working with companies all throughout the energy value chain. Sandstone helps both small and large-cap energy companies to develop customized applications and manage data workflows/integration throughout the entire business. With experience in implementing enterprise networks, supercomputers, and cellular tower solutions, Sandstone has become a trusted source and advisor in this space. Stuart has led the “Total Corporate Digital Integration” platform at Sandstone and works with Sandstone clients to help integrate all aspects of modern digital business. He is also the Executive Publisher of www.energynewsbeat.com, the best source for 24/7 energy news coverage and is the Co-Host of the energy news video and Podcast Energy News Beat. Stuart is on Board Member of ASN Productions, DI Communities Stuart is guided by over 30 years of business management experience, having successfully built and help sell multiple small and medium businesses while consulting for numerous Fortune 500 companies. He holds a B.A in Business Administration from Oklahoma State and an MBA from Oklahoma City University.