What just happened? The latest development in the Elon Musk vs. Twitter spat has seen the platform make an SEC filing that rebuffs Musk's claims he was within his rights to back out of the $44 billion acquisition. Twitter says it is committed to completing the deal at the agreed $54.20 per share price—the current price is $41.06—and it plans to pursue legal action to force Musk into the purchase.
Musk had cited the number of fake accounts on Twitter as major point of contention. The world's richest man previously claimed Twitter's alleged refusal to reveal bot numbers constituted a material breach of the deal and allowed him to avoid the $1 billion breakup fee.
In a public filing, Twitter said Musk's claims were "a story, imagined in an effort to escape a merger agreement that Musk no longer found attractive once the stock market and along with it, his massive personal wealth, declined in value."
Twitter claims less than 5% of accounts on the site are fake. Musk's team, however, says at least 10% of daily active users who see ads are inauthentic, and Twitter is trying to conceal this figure. A recent legal filing alleges Twitter hid the total number of its users who see ads. As per The New York Times, the company responded by saying Musk is trying "to distort data received from Twitter to sponsor wild conclusions" and its data is accurate.
Musk's lawyers claim that using a tool called Botometer, designed by Indiana University to measure inauthentic accounts, analysts found that Twitter was lying about the number of fakes on the platform. It denies the allegations.
"Twitter was miscounting the number of false and spam accounts on its platform, as part of its scheme to mislead investors about the company's prospects," Musk's legal team wrote. "Twitter's disclosures have slowly unraveled, with Twitter frantically closing the gates on information in a desperate bid to prevent the Musk parties from uncovering its fraud."
Twitter previously made a "fire hose" of raw data consisting of every tweet posted every day available to Musk. He then claimed Twitter had placed an artificial cap on the number of searches his team could run on the data, but the reality was that it had hit the monthly limit of 100,000 queries, so Twitter increased the cap to 10 million. That still didn't satisfy Musk.
When Twitter sued Musk over him walking away from the deal, it said he treated the process like an "elaborate joke." Some of the memes Musk used to mock the situation, including one with internet favorite Chuck Norris, were used in the filing as proof.
"The counterclaims are a made-for-litigation tale that is contradicted by the evidence and common sense," Twitter said. "Musk invents representations Twitter never made and then tries to wield, selectively, the extensive confidential data Twitter provided him to conjure a breach of those purported representations."
The Financial Times writes that Twitter is "willing to go to war" if that what's needed to complete the deal, adding that CEO Parag Agrawal has been "more aggressive internally."
Twitter won the first battle in the legal case last month when the judge agreed to fast-track the trial. It will last just five days and start in October rather than next year, which is when Musk's camp wanted it to begin.
Twitter lost revenue in the second quarter, something it blamed on the turmoil caused by Musk's actions.