On Monday, a judge in the lawsuit by Twitter against Elon Musk ruled that the social media company would be required to turn over documents from a former executive, revealing how many “fake accounts” are actually on the platform.
“Twitter needs to give Elon Musk documents from a former Twitter executive who Musk said was a key figure in calculating the amount of fake accounts on the platform, according to a Monday court order,” Reuters reported.
“Bot and spam accounts on Twitter have become a central issue in the legal fight over whether Musk, who is Tesla Inc.’s chief executive, must complete his $44 billion acquisition of the social media company,” the report noted.
“Twitter was ordered to collect, review and produce documents from former General Manager of Consumer Product Kayvon Beykpour, according to the order from Chancellor Kathaleen McCormick of the Delaware Court of Chancery,” it added.
Elon Musk announced in June that he intended to abandon the $44 billion offer for Twitter after the company failed to provide information about “bot accounts.” Twitter responded by filing a lawsuit that would require the Tesla CEO and richest man in the world to uphold the deal.
In a letter to Twitter’s board, Musk’s lawyer Mike Ringler said Musk had sought data to determined the number of “fake or spam” accounts on the social media platform.
“Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information,” the letter said.
Musk’s case would be significantly strengthened if it is discovered that Twitter had attempted to defraud him during the takeover process.
“A reverse breakup fee paid from a buyer to a target applies when there is an outside reason a deal can’t close, such as regulatory intermediation or third-party financing concerns. A buyer can also walk if there’s fraud, assuming the discovery of incorrect information has a so-called ‘material adverse effect.’ A market dip, like the current sell-off that has caused Twitter to lose more than $9 billion in market cap, wouldn’t count as a valid reason for Musk to cut loose — breakup fee or no breakup fee — according to a senior Mergers and Acquisitions lawyer familiar with the matter,” CNBC reported.
Twitter’s documents could lead to Musk purchasing the company after all, as he previously stated that he may be willing to purchase should the user data be released. Such a move may be the last hope for a company that has promised increasing censorship in the months leading up to the 2022 midterm elections.
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