Elon Musk and Twitter continue to play a high-stakes game of poker, replete with gambits and countermoves in a weirdly captivating show of one-upmanship. As most of our readers would know by now, Twitter has initiated legal proceedings against Elon Musk for abandoning the agreement to take the social media giant private in a $44 billion deal. Musk had cited Twitter’s failure to satisfactorily prove the fidelity of its Monthly Active Users (MAUs) metric as a major stumbling block to the consummation of the deal, repeatedly casting aspersions on Twitter’s claims that less than 5 percent of the active accounts on the platform could be defined as bots or fake accounts. Musk also took exception to Twitter’s recent decision to fire two key executives as well as lay off a third of its talent acquisition team. Meanwhile, Twitter has repeatedly stated that the quantum of bots on its platform is not a material legal impediment to the consummation of the takeover deal, especially as Elon Musk had waived due diligence during the negotiations phase. The high-stakes 5-day legal showdown between Elon Musk and Twitter is now scheduled to take place in October 2022. This brings us to the crux of the matter. Elon Musk launched a countersuit against Twitter on Friday, seeking class status. The CEO of Tesla asserted that he had a fiduciary duty toward Twitter’s shareholders on the back of his 9.6 percent stake in the social media giant. Musk also stressed that the takeover agreement had granted him “veto” powers over many of Twitter’s decisions. Readers should note that the exact text of this countersuit is yet to be made public. In response to this move by Elon Musk, Twitter has filed sweeping subpoenas and document requests against the CEO of Tesla’s associates in the deal, including investors such as Chamath Palihapitiya, David Sacks, Steve Jurvetson, Marc Andreessen, Jason Calacanis, and Keith Rabois. Twitter has also subpoenaed Morgan Stanley and the Bank of America, both of which are assisting Musk in the takeover deal. Specifically, Twitter is seeking records related to the deal’s financing, including “checklists, timelines, presentations, decks, organizational calls, meetings, notes, recordings,” as per the reporting by The Post. Finally, Twitter is seeking additional information related to Elon Musk’s communication in the runup to and during Twitter’s all-hands meeting last month, where the CEO of Tesla had speculated that the deal might still go ahead but at a lower price. Bear in mind that Musk had placed the deal on hold just a few days before this meeting.
I have nothing to do with this aside from a few snarky comments, but got a “YOU ARE HEREBY COMMANDED” document notice. — Joe Lonsdale (@JTLonsdale) August 1, 2022 Meanwhile, Joe Lonsdale, an associate of Elon Musk, has taken a dim view of Twitter’s latest step, terming it a “giant harassing fishing expedition.”
