Twitter is currently battling Musk in court over his attempt to cancel a previous offer to buy the social media platform for $44 billion. Dorsey was subpoenaed by Musk last month over documents related to “the impact or effect of false or spam accounts on Twitter’s business and operations” and will face questions from both sides of the legal dispute on Tuesday, according to a report from Bloomberg.
Musk, a longtime friend of Dorsey, wants to cancel the merger over concerns that the actual share of fake accounts on the platform could range as high as 33% rather than the company’s reported 5%, with a lower number of monetizable daily active users potentially justifying a lower valuation. A trial to determine the status of the acquisition is scheduled for October 17.
Dorsey — who co-founded Twitter and resigned last year to lead financial transactions company Block — has called Musk and his mission to “extend the light of consciousness” the “singular solution” he trusts to run the social media company.
“I love Twitter. Twitter is the closest thing we have to a global consciousness,” Dorsey said. “The idea and service is all that matters to me, and I will do whatever it takes to protect both. Twitter as a company has always been my sole issue and my biggest regret. It has been owned by Wall Street and the ad model. Taking it back from Wall Street is the correct first step.”
Dorsey still retains a 2.4% stake in Twitter, which is now led by CEO Parag Agrawal. A majority of Twitter shareholders voted last week to greenlight the merger deal with Musk, who remains the company’s largest shareholder through his 9.6% stake.
The weeks before the trial have been marked by a handful of victories for Musk’s team. Most recently, Delaware Chancery Court Chancellor Kathaleen McCormick denied Twitter attorneys’ request to access Musk’s email accounts at Tesla and SpaceX on the grounds that such an arrangement would violate attorney-client privilege.
“Musk had ‘unrestricted’ personal use of his Tesla email account, that ‘no one’ at Tesla can access those emails without Musk’s consent or ‘to the extent legally necessary,’ and that ‘nobody’ at SpaceX can access his email account without Musk’s express consent,” McCormick remarked based on affidavits from lawyers and information technology professionals at the two companies. “These additional facts make Musk’s expectation of privacy objectively reasonable. Twitter’s motion is denied.”
McCormick also granted Musk’s lawyers permission to utilize the testimony of former Twitter executive Peiter Zatko, who claimed in a recent whistleblower report that his colleagues did not have the resources or motivation necessary to calculate the number of fake accounts on the platform. Zatko told members of the Senate Judiciary Committee last week that the company has a number of cybersecurity flaws, as well as exposure to foreign intelligence agencies.
However, attorneys for Twitter contested Musk’s rationale for passing on the deal by producing text messages he sent to Michael Grimes, an executive at investment bank Morgan Stanley, indicating that he was concerned about macroeconomic conditions stemming from the Russian invasion of Ukraine. The messages could potentially place Musk in breach of contract, which binds the buyer to use his best efforts to complete a deal, and could work against his claim that an inaccurate number of false accounts was behind his recent hesitancy.