There aren't claiming fraud, there are claiming breach of contract. Including, among other things, by failing to maintain operations in the regular course of business because of, I kid you not, allowing some senior officials to resign.

(It's true some of the many other things that are claimed to be breaches relate to alleged failure to fulfill obligations to provide information that Musk supposedly wanted to determine if other claims that has been made were fraudulent, but that's different than alleging fraud.)

It says in the first paragraph about making misleading representations. That is lawyer talk for lying. Lying in this context is fraud.

Secondly, the ceo was firing aka asking for resignations from key people, no? That is not maintaining the business, that seems like sabotage.

> It says in the first paragraph about making misleading representations.

It says that after, and modified by, the phrase “appears to have”.

Musk’s lawyers are saying that Twitter actually breached the agreement. They are saying it looks like Twitter may have done other bad things, too, but that's not the same as claiming that Twitter actually did the other things.

> Secondly, the ceo was firing aka asking for resignations from key people, no?

The separately call out people being forced out and people resigning. Absent something not in the letter, the former is a much more reasonable, on its face, complaint.

Lawyer-talk for fraud is "fraud".

Not sure what your point is. I said misrepresentations is lawyer talk for lying…

And “appears to have” is lawyer talk for “we don't know that this occurred and can't prove it and absolutely want to make clear that we will not be accountable for claiming it actually happened.”

It's lawyer talk for "We think it happened but we want wriggle room"

It's also lawyer talk for “we’d like the recipient/reader of the document to think it happened, but we don't want accountability, e.g., in the case of a document intended to be made public, for defamation.”

You said "in this context lying is fraud", and that's not the case, which is why lawyer talk for "fraud" is "fraud", not "lying".

Misrepresentation is a necessary but insufficient component for a finding of fraud.

That’s why there not outright claiming fraud just lying. That way they avoid illegal issues but if they were to seek damages it would be a fraud case.

They aren't claiming lying either.

They are claiming breach of contract, and that it looks to them like lying which, if it did happen, might be fraud, but they can't tell, in part because part of the alleged breaches is Twitter not giving them information that might clarify whether the other claims were true or not.

Musk's lawyers are too scared to point out what they are lying about though and where they got that information cause if they did point it out it would destroy Musk's allegations.

It's not about being scared so much as it is about professionalism.

Accusing someone of lying is in effect an accusation of bad faith. An accusation of bad faith is a serious matter, and if you play too freely with it, then you're engaging in bad faith yourself. [1]

The concept of misrepresentation is in a grey area that may or may not have a component of bad faith (see for example the concept of "fraudulent concealment" in courts of equity,[2] the test for which includes a finding of misrepresentation, and note that "fraud" in equity is, confusingly, not at all the same concept as common law fraud), so it's a much more intelligent accusation to make in court unless you have highly probative evidence. [3]

[1] Clean hands doctrine: https://en.wikipedia.org/wiki/Clean_hands

[2] Equity: https://en.wikipedia.org/wiki/Equity_(law)

[3] IANAL

There is nothing professional about what Musk has done. That is like saying Bernie Madoff was just being professional.

I'm talking about the lawyers, not Musk.

> Musk's lawyers are too scared to point out what they are lying about though and where they got that information

Their central allegation is that they didn't get the information because of Twitter’s refusal to uphold their obligations.

The reps are in the merger agreement, ie a contract.

There is a covenant in the contract about running the business between signing and closing.

The claim is breach of contract.

> They’re saying they’re lying about the numbers. Which would be fraud.

But they've been sending the SEC these same numbers calculated using the same methodology since 2013, right? If they were materially adverse circumstances, you'd imagine that someone would have caught this in the last 9 years...

Also, Musk routinely knowingly confuses DAUs and normal users. Twitter claims 5% of daily active users are bots, but Musk complains about how many of his followers are bots, when clearly many of those wouldn’t be DAUs.

Twitter’s CEO has addressed this. Musk responded with a poop emoji: https://twitter.com/paraga/status/1526237578843672576?s=20&t...

Not only that, but monetizable DAUs, which is basically an advertising metric consisting primarily of folks whose only actions on a given day might just be "checking my feed, liking a couple posts", and from which fake users are likely already removed without there being a strong reason to shut down their accounts. Whatever ad impressions those users get don't get billed to advertisers, and there's no strong motive to shutting them down if they haven't published anything contravening Twitter's policies...

> Twitter claims 5% of daily active users are bots

You also left out an important piece: 5% of their *monetizable* DAU. Not just DAU.

But you're right, Elon's been convincing the public that Twitter has made claims they never actually made.

I can't get to the end of that thread without the Signup nag taking over the whole window and obliterating the content. Tried half a dozen times. Finally got there via an Incognito window (though still don't see Musk's response).

So Twitter tagged my device with a cookie specifically meant to keep me from viewing users' content. How's that support their mission statement, "To give everyone the power to create and share ideas and information instantly, without barriers"?

It's not in my interest, or that of their users. The only benefit is to their bottom line, and I'd argue tactics like that do more long term damage than good. Certainly doesn't make me want to sign up or log in.

Go choke on Elon's <shit emoji>, Twitter. /rant

Which only shows Musk is shit himself,

They have said, our bes guess is 5%, but the accuracy is limited by these factors, and we make very little promises that it is correct.

Besides, Musk has been complaining about bots for a long time, and has made it clear he doesn't believe the 5% number way before the acquisition. If the 5% number was a sticking point for him, he could have demanded due diligence. He did not demand that, thereby waiving his rights.

This flavor of “fraud” is something I’d expect an activist investor or short-seller to address, not the SEC.

The SEC isn't being asked to address anything, it's being informed that Musk is moving to drop the merger which was something SEC had to be informed about the same way that it had to be informed of the merger plans, as I understand it.

This is now going to a Delaware court, not the SEC. The filing here is just a notification to shareholders.

Fraud is not enough. It has to be fraud bad enough to cause a materially adverse effect, which means it would have to seriously impair the value of the business.

Which is why it's not fraud --- Delaware has effectively never finds MAEs. The premise of him walking away is his (utterly specious, but perhaps practically effective) claim that Twitter breached the acquisition contract by refusing to live up to its information covenants.

Which is nonsense, since the numbers in question are not verifiable.

How can you identify a "spam account"? It's not possible to definitively determine the intent of someone opening or using a new account.

So the numbers are arguable either way. Musk is using this fact to try to wriggle out of a disastrous impulse buy.

It’s not that subjective anyone using twitter still sees spam accounts promoting a website, business, product, or scam on every post. Twitter just said they remove 1M spam accounts each day. Their mDAU is claimed to be around 200M. This means they are deleting around half a percent of their users every single day. That seems like a lot to be identifying to me, but doesn't really determine if they are deleting enough or not but does show me that being higher than 5% is very possible when you have to delete that many accounts every 10 days.

Why do you think Twitter list accounts it knows to be bots as mDAU? Those are very different categories.

I’m not saying they are. I’m saying that they are banning enough bots to make up 5 percent every 10 days. With that amount of bots being banned, the possibility of that amount also being missed from being banned is substantial.

If he's claiming fraud, doesn't he have to prove it?

Of which they have 0 proof of. In fact, Twitter gave them the access they asked for last month.

They who and they who?

They'd have to prove it in court. Good luck with that.

It is quite easy to prove twitter is mostly full of bots. You do not even need a firehose to come to that conclusion.

Right, but Twitter's method of counting the number of daily active users, meaning the number who are seeing ads, which is what the SEC report refers to, was allegedly designed to exclude most bots. Perhaps it's wrong, but they never said 5% of accounts are bots (far more are).

Twitter's SEC filing: "In making this [mDAU] determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated."

Neither side said bots, but bots _should_ be a subset of "false or spam" accounts. They basically used "our judgement" and give themselves complete discretion. And 5% is a nice round number plucked from nowhere which sounds awesome! Providing proof of that to a Banker or Backer (or Elon or a future Jury) isn't therefore possible or intended. It's marketing spin in an SEC filing.

> but bots _should_ be a subset of "false or spam" accounts

Do you mean "they should report all bots as part of their false or spam accounts number", or that you believe logically bots are in fact a subset of the number twitter reports, and so twitter's number is bogus if 50% of all accounts are bots?

If it's the latter, you're missing the point of their mDAU marketing metric. It already has all the obvious bots and non active accounts removed. They're saying, what % of advertising revenue turns out to be from bots.

If you have proof that twitter is > 50% bots, you should give that evidence to Musk. Or, give it to an attorney that's eager to see Twitter's board go to jail for putting false data in SEC filings.

Even if 50% are bots it doesn’t matter. Twitter’s claims are around mDAUs, not accounts.

But Twitter said that the number was provided on a best effort basis, so you don’t need to prove the number was wrong. rather, you need to prove that Twitter tried to lie. Unless there’s an internal email saying “I’m making up the number 5% because we know it’s higher but we don’t want to write that,” it doesn’t matter at all. If such an email existed, Twitter wouldn’t be fighting the back-out because revealing that email would mean damages for existing shareholders.