The crux of Elon Musk’s countersuit against Twitter

Elon Musk, as you surely know by now, backed his $44 billion offer to buy Twitter in July, much to the delight of corporate litigants everywhere. Days after Musk’s withdrawal, the social media company filed a lawsuit against Musk to force him to complete the acquisition. And now this week, Musk filed a furious, 127-page countersuit—the full Text Of which Twitter has been accused of several “sins” and has just become public.

The document is lengthy and full of legalese, but fundamentally, Musk’s legal team is betting on an argument to win: Twitter intentionally grew its monetizable user base to more than 10 times its actual size. was, and so his offer to buy Twitter was based on faulty data.

Musk’s argument sounds familiar because it is. Inflated users are a point that he plant In some What they allege is why they tried to acquire the company: Twitter’s actual user base is not as strong as Twitter claims, because of the bots and various spam accounts being counted as humans.

User Metrics Are the Core of Musk’s Argument

Twitter claims to account for bots in its go-to, self-reported metric, dubbed mDAUs, for global monetizable daily active users. These are people who use Twitter, view ads, or pay for the service, and make money from Twitter. But Musk is attempting to invalidate Twitter’s mDAU through an onslaught of claims, presented as a combination of his own investigation and information Twitter has shared with his team.

“Twitter’s own disclosure to Musk parties shows that although Twitter has 238 million ‘monetizable daily active users’, users who actually see ads (and thus, are reasonably considered ‘monetizable’). will) is approximately 65 million less than Twitter,” the countersuit reads. “In fact, most ads are served to fewer than 16 million users – a mere fraction of the 238 million mDAU figure that Twitter deceptively markets to.”

The countersuit called the mDAU a “concoction” metric that Twitter invented after three quarters of declines in 2020 — alleging that Twitter created mDAUs only as a way of protecting executive bonuses. .

“In 2020, Twitter based its executives’ cash bonus pool on revenue, operating income and adjusted EBITDA. After Twitter missed those goals in 2020, and only 32% of the cash bonus pool was funded, Twitter determined that the mDAU (a highly manipulable number) should be considered in determining whether The officers have received these bonuses,” the lawsuit reads. “Following that change, in 2021, 100% of this executive bonus pool was funded.”

Twitter claims Musk figures are rubbish

On their own, Musk’s arguments appear pernicious. However, when the public is seeing Musk’s countersuit for the first time, Twitter’s lawyers have already taken a close — and they actually shared a rebuttal yesterday,

You can read Twitter’s full answer. HereBut as Elizabeth Lopatto broke Company’s argument ledge, Twitter’s reply is that it has no idea what Musk is talking about, either his bot counts or MDAUs.

“Musk is not taking the same measurements as Twitter or even using the same data as Twitter,” writes a suit, pointing out that much of their investigative analysis stemmed from an app called Botometer. Twitter also took this opportunity to make sense of it. Musk’s own critical conversation was like a wrong emoji,

Of course, last April, Twitter revealed that It miscalculated its own users for three yearsBy reducing its count by about two million people per quarter between 2019 and 2021. But Musk is still arguing that, when it comes to Twitter users who actually make money to the company, Twitter reports are off by the tens to hundreds of millions, rather than a few.

The matter is to be heard in the court on October 17.

s.parentNode.insertBefore(t,s)}(window, document,’script’,

fbq(‘init’, ‘1389601884702365’);
fbq(‘track’, ‘PageView’);