Billionaire Elon Musk took to Twitter and challenged the company’s CEO Parag Agrawal to a “public debate” about fake accounts and spam amid a contentious legal battle over a $44 billion acquisition.
Musk submitted an offer to the Securities and Exchange to acquire Twitter in April of this year. After the companies agreed to move forward with the take-private deal, Musk said he was ending the acquisition and accused Twitter of presenting false numbers, including in its SEC filings regarding the amount of monetizable daily active users and the number of spam and social network bot accounts.
Twitter then sued Musk in Delaware Chancery Court to ensure the deal went through as promised, and Musk filed counterclaims and a countersuit there on July 29.
In a series of tweets that Musk began posting shortly before 1 a.m. on Saturday, Aug. 6, Musk interacted with a fan who had summarized his accusations about Twitter, including that it was holding him back and giving him “outdated data” and “a set of fake data,” when he asked the company for details on how it tabulates mDAU and forecasts spam and bot accounts.
The CEO of Tesla and SpaceX wrote: “Good summary of the problem. If Twitter would just provide their method of sampling 100 accounts and how they are verified to be real, the deal should go ahead on the original terms. However, if their SEC filings turn out to be materially false, then they shouldn’t.”
Shortly after 9 a.m. Saturday morning, Musk started a poll on Twitter, asking his followers to vote on whether “[l]more than 5% of daily Twitter users are fake/spam.” Respondents to the informal poll could choose one of the answers provided by Musk, which read either “Yes” followed by three robot emoticons, or “Lmaooo no.” (The slang abbreviation “lmao” means “laughing, my a– off.)
Musk also wrote on Saturday morning: “I hereby challenge @paraga to a public debate about the percentage of bots on Twitter. Let it prove to the public that Twitter has <5% fake or spam users daily!”
A source close to the company says a debate will not take place outside of the pending process.
Musk’s lawyers did not respond to requests for comment Saturday, and a lawyer for Twitter declined to comment on Musk’s Saturday tweets.
Twitter’s lawyers have argued in court documents that Musk gave the company only twenty-four hours to accept his offer before presenting it directly to Twitter shareholders and waived due diligence, including a chance to seek more information for fake or spam accounts.
They wrote in court filings, “Musk’s repeated mischaracterizations of the merger agreement cannot change his clear words.”
At Tesla’s annual shareholder meeting on Aug. 4, Musk was asked to talk about Twitter during a question-and-answer session that followed proxy voting.
He said, drawing laughter from the audience, “Obviously I have to be a little careful what I say about Twitter because there’s this lawsuit and stuff.” He confirmed that the only two publicly traded securities he owns are Tesla and Twitter.
And then he spoke as if he still wanted to own the social networking company, a stark contrast to the arguments Musk made through his lawyers in Delaware court documents, in which Musk argued he shouldn’t stick with the deal.
At Tesla’s 2022 shareholder meeting, Musk said: “I think in the case of Twitter, because I use it a lot, I often shoot myself in the foot, you know, digging my own grave and so on.” I think it’s — I understand the product is pretty good, so I think I have a good idea of where to direct Twitter’s engineering team to make it radically better.”
He added that Twitter will “help accelerate” a “pretty grand vision” he has to build a business he’s had in mind since his earliest years as a tech entrepreneur, X.com or X Corporation.
“Obviously this can be started from scratch,” he said, “but I think Twitter will help speed that up by three to five years. So it’s kind of something that I thought would be pretty useful for a long time. I know what. You don’t have to have Twitter for it, but like I said, it’s probably at least a three-year accelerator, and I think it’s something that’s going to be very useful for the world.”
Musk didn’t go into more detail about that meeting. However, he reportedly said during a town hall meeting with Twitter officials in June this year that he wants to grow Twitter’s user base to a billion people and sees Twitter as a platform that can evolve into an app like China’s WeChat. “super app,” which includes everything from messaging, video and social media to mobile and on-site payments, with a robust app ecosystem.
Unless they reach a settlement first, Twitter and Musk are headed for a five-day trial in Delaware that begins Oct. 17. The judge ruling on the case is Chancellor Kathaleen St. J. McCormick.
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