On Wednesday, a judge ruled that Tesla CEO Elon Musk can use evidence from a whistleblower in his ongoing case against social media giant Twitter.
Twitter is embroiled in a battle with Musk in court over his attempt to terminate the $44 billion offer to buy the company. Musk claims that the reason for his attempt to nix the deal is because the actual number of fake accounts on the platform is significantly higher than the company’s reported 5%, with the true number being possibly as high as 33%. A lower number of monetizable daily active users potentially justifying a lower valuation.
The trial is scheduled for October 17 and will determine if Musk will be forced to buy the company or not.
Delaware Chancery Court Chancellor Kathaleen McCormick granted attorneys representing Musk permission to use the account of former Twitter executive Peiter “Mudge” Zatko in their arguments. Zatko claimed in a recent whistleblower account that his colleagues did not have the resources or motivation necessary to determine the actual number of bots on the platform.
Zatko’s report was obtained by CNN and The Washington Post and claimed, in addition to the initial allegations, that Twitter leadership misled board members and government officials about potential vulnerabilities that left the platform open to hacking, foreign manipulation and spying. He asserted that one or more current employees are working for a foreign intelligence agency.
“All engineers had access. There was no logging of who went into the environment or what they did,” Zatko wrote. “Nobody knew where data lived or whether it was critical, and all engineers had some form of critical access to the production environment.”
Twitter reported losses of $0.08 per share in its second-quarter earnings, falling below the $0.14 gain per share expected by analysts. The rough quarter was attributable to “advertising industry headwinds associated with the macroenvironment as well as uncertainty related to the pending acquisition of Twitter by an affiliate of Elon Musk,” the company said in a press release.
Twitter’s lawsuit argues that Musk is obligated to complete the deal. “Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests,” the lawsuit said. “Musk apparently believes that he … is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away.”
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