Musk seeks documents from Jack Dorsey in fight against Twitter deal

Musk seeks documents from Jack Dorsey in fight against Twitter deal
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WILMINGTON, Del., Aug. 22 (Reuters) – Billionaire entrepreneur Elon Musk seeks documents from Twitter Inc.(TWTR.N) As CEO of Tesla and SpaceX, co-founder Jack Dorsey continues his legal battle to walk away from his $44 billion deal for the social media company, according to a court filing.

Dorsey, who resigned as Twitter’s CEO in November and left the board in May, was asked to document and communicate Musk’s deal to buy the company in April and spam accounts on the platform, according to a copy of the subpoena.

Dorsey, CEO of payment processing company Block Inc, did not immediately respond to a request for comment. Block was co-founded by Dorsey and changed its name from Square Inc last year.(SQ.N).

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Musk, who is the richest person in the world due to his stake in Tesla Inc, told Twitter in July that he has terminated his deal to buy the company for $54.20 per share because Twitter alleged it violated the deal agreement. Twitter and Musk have since sued each other, and Twitter asked the Delaware Chancery Court judge to order Musk to close the settlement. A five-day trial will begin in October. 17.

The subpoena requested documents and communications on Twitter’s use of mDAU, a measure of active users on its platform. Musk claimed that the company defrauded him by hiding the number of fake accounts in regulatory filings he said he valued the company.

Twitter denied Musk’s spam allegations.

Twitter CEO Jack Dorsey addresses students at a town hall at the Indian Institute of Technology (IIT) in New Delhi, India, on November 12, 2018. REUTERS/Anushree Fadnavis/

Musk also requested information and documents about the alternative active user measures the company is considering and the use of mDAU in executive salaries and annual targets.

Twitter declined to comment.

Dorsey backed Musk’s takeover bid for Twitter, as the two men agreed on more transparency for its algorithm and more control over the content users see.

Dorsey also tweeted that he believes Twitter is being held back by its advertising model, and Musk said Twitter should rely more on subscription fees and services like money transfers between users.

Musk and Dorsey had debated in March about Musk’s joining the Twitter board, before Musk announced that he had purchased a 9.1% stake in Twitter. Musk accepted the board of directors membership, but before he took office, he changed course and offered to buy the company.

Shares of Twitter fell 2.5% to $42.89 late Monday.

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reporting by Tom Hals in Wilmington, Delaware; additional reporting by Katie Paul in San Francisco; Sheila Dang in Dallas; Editing by David Gregorio

Our standards: Thomson Reuters Trust Principles.

Tom Hals

Thomson Reuters

Award-winning reporter with more than two decades of experience in international financial news in Asia and Europe, covering US courts and law, from the COVID-19 pandemic to high-profile criminal cases and Wall Street’s biggest failures.

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