Twitter has sued Elon Musk for terminating his $44 billion bid to buy its platform. The U.S. Securities and Exchange Commission (SEC) also questioned Twitter about the number of spam accounts.
Court orders Twitter to provide additional data to Elon Musk
Delaware Chancery Court Judge Kathaleen St. J. McCormick signed an order Thursday requiring Twitter to provide additional data to Tesla and Spacex CEO Elon Musk. Plaintiff Twitter sued the defendants Musk and his two companies, X Holdings I and X Holdings II, for terminating the $44 billion deal to buy the social media platform. Musk counter-sued Twitter.
Judge McCormick stated in his order:
Defendants’ data requests are absolutely foreign.
She added: “Read literally, defendants’ document request would require plaintiff to produce trillions and trillions of data points reflecting all the data Twitter could possibly store for each of the approximately 200 million accounts included in its mDAU account every day and every three years“.
The social networking company defines monetizable daily active users (mDAU) as “Twitter users who logged in and accessed Twitter on a given day through Twitter.com or ad-capable Twitter applications“.
The order continues:
Plaintiff is ordered to produce a subset of what defendants have requested: the 9,000 accounts reviewed as part of plaintiff’s fourth quarter 2021 audit, which the parties refer to as the “historical snapshot.”
” Applicant has represented that, with considerable effort, these documents could be produced in less than two weeks, and Applicant will endeavor to meet that deadline. In addition, the applicant must produce sufficient documentation to show how these 9,000 accounts were selected for review“, the order details.
Meanwhile, the Securities and Exchange Commission (SEC) has questioned Twitter about its method of identifying spam accounts, according to a new regulatory filing released Wednesday.
In a June 15 letter, the SEC asked Twitter CEO Parag Agrawal to provide information about how the company calculates the number of bot accounts. “We note your estimate that the average number of fake or spam accounts in FY2021 continues to be less than 5% of mDAU“, the SEC writes, adding:
To the extent material, please disclose the methodology used to calculate these numbers and the underlying judgments and assumptions used by management.
Twitter responded to the SEC’s inquiry with a standard description of the methodology on June 22. Twitter informed the securities regulator that it disclosed “adequately“the methodology he uses, noting that he randomly selects thousands of accounts for review by individuals each quarter.
The SEC sent another letter to Twitter on July 27, stating, “We have completed our review of your filings. We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comment, action or inaction by the staff.“
Earlier this month, Musk sold nearly 8 million Tesla shares. The Tesla boss said that in the event that Twitter forces the buyout deal and some financial partners do not come forward, it is important to avoid a rush sale of Tesla shares.