Musk
Twitter A lawsuit was filed in a Delaware court on Tuesday (July 12) against Tesla boss Elon Musk ( Elon Musk) after the billionaire said he would Termination of $44 billion acquisition of Twitter Inc.
Twitter said that after signing the binding merger agreement, Musk now "refuses to fulfill his obligations to Twitter and its shareholders because the transaction he signed no longer serves his personal interests."
Twitter said in the lawsuit "After publicly tweeting, proposing and signing a seller-friendly merger agreement, Musk clearly believed that he - unlike other parties bound by Delaware contract law - was free to change ideas, badmouthing the company, disrupting its operations, destroying shareholder value, and then walking away...these breaches cast a pall over Twitter and its business."
Twitter said it was trying to prevent Musk from further violating the agreement. , and forced him to complete the merger "subject to the satisfaction of a few outstanding conditions."
Musk announced on Friday that he would terminate the deal to acquire Twitter on the grounds that Twitter violated multiple terms of the merger agreement. Because the two sides disagreed over the number of fake accounts on the platform.
Musk proposed a $44 billion acquisition of Twitter in April this year, and Twitter's board of directors decided to accept Musk's acquisition proposal on April 26, and the two parties signed an agreement for the merger. However, shortly after the merger agreement was signed, Musk began to complain about the problems of fake accounts and spam on Twitter, and once shelved the transaction, causing Twitter's stock price to fall again and again.
What is a fake account?
Fake accounts, sometimes referred to as "bots," "spam," or "spambots," are inauthentic accounts that mimic people using Twitter. Some fake accounts are automated, but others are operated by humans, which makes detecting them complicated. Fake accounts can tweet to people, share tweets, follow and be followed by others, and more.
html For years, Musk has expressed concerns about fake accounts on Twitter. In 2020, he appeared at Twitter employee events and encouraged the company to do more to prevent and remove fake accounts.Since announcing his intention to acquire Twitter in April, Musk has repeatedly tweeted about fake accounts on the platform. In May, when Twitter CEO Parag Agrawal tweeted about how the company detects and combats fake accounts, Musk tweeted a "poo" emoji as respond.
The US news website "Business Insider" reported on Tuesday that Twitter specifically mentioned Musk's response post in the indictment as "one of the evidences that Musk has disparaged the company."
In a six-paragraph letter on June 6, Musk's lawyers asked Twitter to provide more information, saying the company had rejected Musk's request to disclose the number of fake accounts on its platform. Lawyers said this amounted to a "clear and material breach" of the deal, saying it gave Musk the right to terminate the agreement. The next day, Twitter agreed to give Musk direct access to the millions of tweets that flow through the company's network every day. Since
went public in 2013, Twitter estimates that about 5% of its accounts are fake. However, Twitter does allow fake accounts and prefers to refer to these accounts as “bots.” Twitter encouraged many of these accounts to label themselves as bots to increase transparency. The company argued that many of those accounts provided useful services.
Twitter defines a good bot account as an automated account that "helps people find useful, interesting, and relevant information." It can automatically provide information including stock prices, earthquakes, and the new crown epidemic.
but other fake accounts are used for bad purposes by governments, companies or bad actors. Sometimes fake accounts are used to attack celebrities or politicians and create a hostile environment for them online.
withdrew from the transaction only because of fake accounts?
While Musk said he pulled out of trading because of the fake accounts, some believe the claim doesn't hold up.
Twitter did say in the merger agreement that its filing with the SEC was correct, and the SEC filing did indicate that Twitter estimated that bot accounts accounted for less than 5% of daily active users, despite their warnings “This estimate is based on an internal review of a sample of accounts, and we used significant judgment in making this decision.” Musk seemed unable to prove that the data was wrong.
Even if Musk can prove that the number of fake accounts on Twitter is significantly higher than the number claimed by the company, Bloomberg columnist Matt Levine, who graduated from Yale Law School , believes that Musk cannot just because Twitter pulled out of the deal after one of its statements was false.
Levine said Musk "still has to get the deal done, unless the representation is false and would have a "material adverse effect" on Twitter. It's a famously under-defined term, but what it usually takes is a pretty catastrophic one Sexual impact. … If bot accounts make up 75% of daily active users and Twitter has been deliberately misleading its advertisers, Musk can expose the scam, advertisers flee, and Twitter faces fraud Legal trouble, then it will definitely have a major adverse impact. "
"I don't think the false account argument is very reasonable. It will certainly not reach the level of a major adverse event that requires Musk to cancel the transaction," said Jay, an investigative reporter at the US news website ProPublica. Jeff Kao revealed.
He said: "It does feel like Musk regrets proposing such a high price per share to Twitter."
Musk proposed to acquire Twitter at $54.20 per share in April. Twitter shares fell 5% in pre-market trading last Monday. The stock price is already well below the $54.20 per share purchase price agreed in April, with Twitter shares closing at $36.75 on Wednesday.
But Joel L. Thayer, an expert on U.S. telecommunications regulations and president of the Digital Progress Institute, believes that Musk’s statement is well-founded.
Twitter will have to disclose fake account information
Garrett believes that as the legal proceedings develop, Twitter will have to disclose more information about fake accounts.
He revealed: "I think Twitter will have to release more information to defend itself and refute Musk's claims that it failed to provide information, or that its statements about the number of bot accounts were inaccurate (or worse). It also More detailed information may need to be released to defend its architecture and methodology for estimating the amount of Twitter bot or spam traffic, as this appears to have significant implications for Musk's claims against the company. However, as we have already observed, This battle will not only be fought in court, but will also be judged by public opinion. "
Thayer also explained this issue accordingly: "It seems that Twitter has already started the process in this regard. On the one hand, they allow Egypt. But even if Elon Musk thinks that's not enough, I'm almost certain that if this goes to trial, it sounds like both sides will be willing to participate, that mysterious legal team. That's likely to be the main focus of discovery. So we'll get answers anyway."
Garrett believes that Twitter and Musk's dispute may also involve broader ethics around free speech. , legal and political issues, and the removal of controversial individuals and opinions from Twitter or other social media platforms.
Thayer believes that this dispute requires congressional action.
"To me, the ideal outcome is ultimately Congressional action," he said. "I've been hoping that Congress would step in and try to figure out how best to encourage these platforms to promote bilateral discourse, maybe not equally, but at least, not Favoring one side or another. One way to do that is to go out in public and basically say that these companies can't use their method of selection to promote one side or the other in terms of political speech. That doesn't mean all speech is. Equally, but it does suggest that at least platforms should be free of bias in how they use these specific moderation practices."I really like that Elon Musk is trying to balance it this way,"
Thayer said. But ultimately it’s up to Congress, not billionaire philanthropy to give us a platform to freely and openly express views that may differ from ours. So my personal opinion is, I'd rather see Congress act on this. "
