Musk is seeking documents from Jack Dorsey to fight the Twitter deal

Musk is seeking documents from Jack Dorsey to fight the Twitter deal
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WILMINGTON, Del., Aug 22 (Reuters) – Billionaire entrepreneur Elon Musk is seeking documents from Twitter Inc(TWTR.N) Tesla and SpaceX co-founder Jack Dorsey is fighting a legal battle to get out of a $44 billion deal for the social media company, according to a lawsuit.

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

Dorsey, who is CEO of payments processor Block Inc., did not immediately respond to a request for comment. Block was founded by Dorsey and changed its name from Square Inc. last year(SQ.N).

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Musk, the world’s richest man based on his stake in Tesla Inc, told Twitter in July that he was canceling an agreement to buy the company for $54.20 per share because Twitter alleged it had breached the deal. Twitter and Musk then sued each other, with Twitter seeking an order in Delaware Court of Chancery to enjoin Musk from closing the deal. The five-day trial will begin in October. 17.

The subpoena sought documents and communications related to Twitter’s use of mDAU, a measure of active users on its platform. Musk claimed the company had misled him by hiding the number of fake accounts, and Musk said he valued the company.

Twitter denied Musk’s spam accusations.

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

Musk also requested documents and communications related to the company’s consideration of alternative measures of active users and the use of mDAU in executive pay and annual targets.

Twitter declined to comment.

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

Dorsey also said he believed Twitter was being held back by its advertising model, and Musk said Twitter should rely more on subscription fees and services such as money transfers between users.

Musk and Dorsey discussed joining the Twitter board in March before Musk announced he was buying a 9.1% stake in Twitter. Musk accepted the board, but changed course before taking office and offered to buy the company.

Twitter shares fell 2.5% to $42.89 in Monday trading.

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Reporting by Tom Hals in Wilmington, Delaware; Additional reporting by Katie Paul in San Francisco; Sheila Dang in Dallas; Edited 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 trials and Wall Street’s biggest failures.

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