I know, I know, you don’t care.But it matters.Twitter has sued Elon Musk in Court of Chancery in Delaware, trying to force Musk to close on the deal to purchase Twitter at the inflated price of $54 per share, totaling $44 billion. Musk backed out of the deal, claiming, among other things, that Twitter has failed to provide sufficient or accurate information as to the percentage of Twitter users who are spam or bot accounts. Twitter wants an expedited trial as early as September.On July 15, 2022, Musk filed his Opposition, which reads in part:
1. This Court should reject Plaintiff Twitter, Inc.’s (“Twitter”) unjustifiable request to rush this $44 billion merger case to trial in just two months. Twitter’s bid for extreme expedition rests on the false premise that the Termination Date in the merger agreement (“Agreement”) is October 24, glossing over that this date is automatically stayed if either party files litigation. By filing its complaint, Plaintiff has rendered its supposed need for a September trial moot.2. Nor does the remainder of the Motion To Expedite (“MTE”) remotely justify extreme expedition, instead highlighting the complexity of the case and the impossibility of completing discovery on the timeline proposed. In fact, Twitter has engaged in tactical delay for two months by resisting Defendants’ information requests, causing Defendants “obvious prejudice” through an overly compressed schedule. Juwell Invs. Ltd. v. Carlyle Roundtrip, L.P., C.A. No. 2020-0338-JRS, at 92 (Del. Ch. May 14, 2020) (TRANSCRIPT) (“Amex”). Twitter’s sudden request for warp speed after two months of foot-dragging and obfuscation is its latest tactic to shroud the truth about spam accounts long enough to railroad Defendants into closing.3. The core dispute over false and spam accounts is fundamental to Twitter’s value. It is also extremely fact and expert intensive, requiring substantial time for discovery. Twitter is a social media platform whose self-professed key performance metric is monetizable daily active users (“mDAU”). Since the Agreement was first signed, new facts have come to light that call into doubt the truthfulness of Twitter’s curiously static representation in SEC filings that less than 5% of its accounts are false or spam.4. On April 28, just three days after signing the Agreement, Twitter restated three years of its mDAU numbers, despite never disclosing the issue to Defendants pre-signing. Post-signing, Defendants promptly sought to understand Twitter’s process for identifying false or spam accounts. In a May 6 meeting with Twitter executives, Musk was flabbergasted to learn just how meager Twitter’s process was. Human reviewers randomly sampled 100 accounts per day (less than 0.00005% of daily users) and applied unidentified standards to somehow conclude every quarter for nearly three years that fewer than 5% of Twitter users were false or spam. That’s it. No automation, no AI, no machine learning.5. Alarmed, Defendants exercised their information rights to validate Twitter’s user claims. At every turn, however, Twitter deliberately erected artificial roadblocks and frustrated Defendants’ efforts. Indeed, on June 20 Twitter admitted the information it provided “is insufficient to perform the spam analysis. . . .” Put simply, Defendants asked for—and were refused—the same information that Twitter relies on in making its <5% representation. The limited information Twitter has provided calls its representations into serious doubt. Meanwhile, Twitter has adopted significant personnel changes without consent.6. Resolving these issues will require complex, technical discovery— including the forensic review and analysis of large swaths of data. Twitter’s Complaint only adds to that complexity. Rather than simply challenging Defendants’ termination, Twitter has manufactured a hodgepodge of baseless new claims, none of which were ever noticed.1 The extensive discovery required for all of these claims cannot be completed within six weeks.
[fn. 1 With the sense of humor of a bot, Twitter claims that Musk is damaging the company with tweets like a Chuck Norris meme and a poop emoji. Twitter ignores that Musk is its second largest shareholder with a far greater economic stake than the entire Twitter board.]
The cesspool of broken souls that is Twitter almost certainly has more than 5% bots, spam, and fake accounts. It never was worth what Musk agreed to pay, so it’s unclear why he cut that deal.
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