In an effort to defend against a lawsuit filed by the business aiming to pressure the billionaire to proceed with their $44 billion takeover proposal, Elon Musk has subpoenaed former Twitter CEO Jack Dorsey.
Musk’s legal team has issued Dorsey with a subpoena, which was made public in court documents on Monday. Dorsey, who left his position as CEO of Twitter last November but continued to serve on the board until late May, a month after the company decided to sell itself to the CEO of Tesla, is being asked a variety of questions by Musk’s legal team.
All records and correspondence pertaining to the merger deal as well as those “reflecting, referring to, or relating to the impact or effect of fraudulent or spam accounts on Twitter’s business and operations” are being sought by Musk’s legal team.
Musk claims the company misrepresented the amount of bot and spam accounts on the site and is now attempting to withdraw from the $44 billion merger agreement. Twitter has accused Musk of exploiting the bots as an excuse to get out of the contract after market conditions changed.
In addition to records and correspondence relevant to Twitter’s use of monetizable daily active users (mDAU) “as a ‘Key Metric,’ as mentioned in Twitter’s SEC filings,” Musk’s legal team is also requesting these items as part of the subpoena. Musk questioned Twitter’s use of the metric in a previous response to the company’s lawsuit, asserting that his analyses reveal that just a small portion of the users Twitter considers mDAU actually earn significant revenue for the company by viewing and engaging with adverts. Additionally, he claimed that despite what Twitter’s public filings suggest, the indicator is not actually a good predictor of future performance.
The latest sign that the legal dispute between the two parties is intensifying is the subpoena issued to Dorsey by Musk’s team, one of several that were issued and made public in court filings on Monday.
Several of Musk’s associates were previously subpoenaed by Twitter, according to court documents and public declarations. A number of well-known investment firms and venture capitalists are on the list, some of whom are members of the so-called PayPal mafia, a group of powerful figures in the tech sector who worked at the payment company Musk cofounded.
Given their long-standing friendship as billionaires, Dorsey initially indicated that he was in favour of Musk taking over the business he helped build. In April, Dorsey tweeted, “In principle, I don’t think anyone should own or manage Twitter. “Elon is the only one I trust to address the issue of it being a firm, though. I have faith in his effort to spread consciousness.”
According to court documents submitted on Monday, Dorsey consented to the subpoena’s service. Starting in October, a five-day trial between Twitter and Musk is planned.