Elon Musk accused Twitter of fraud in a countersuit over his aborted $44 billion deal for the social media company, which he said held back necessary information and misled his team about its true user base.
The countersuit by the billionaire and Tesla CEO alleges that Twitter committed fraud, breach of contract and violation of the Texas Securities Act.
Musk’s counterclaims were filed confidentially last week and unsealed in a filing late Thursday at the Delaware Chancery Court.
Musk had offered to buy Twitter earlier this year, then tried to back out of the deal by claiming the social platform was infested with a larger numbers of “spam bots” and fake accounts than Twitter had disclosed.
Twitter sued to force him to complete the acquisition. Musk responded by filing his countersuit.
Musk’s attorneys argued that Twitter “misrepresentations or omissions” distorted Twitter’s value and caused Musk to agree to buy it at an inflated price. They said Twitter’s own disclosures revealed that it has 65 million fewer “monetizable daily active users,” who can be shown digital ads, than the 238 million that Twitter claims.
The filing also said most of Twitter’s ads are shown only to a sliver of the company’s user base.
In an unexpected twist, Twitter filed its response denying Musk’s accusations before Musk’s own counterclaims surfaced.
Twitter called Musk’s reasoning “a story, imagined in an effort to escape a merger agreement that Musk no longer found attractive.”
The case is scheduled to go to trial on October 17.
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