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Musk seeks documents from Jack Dorsey in fight over Twitter deal

Musk seeks documents from Jack Dorsey in fight over Twitter deal

[html]By Tom Hals WILMINGTON, Del. (Reuters) – Billionaire entrepreneur Elon Musk is seeking documents from Twitter Inc co-founder Jack Dorsey as the CEO of Tesla...
                              

By Tom Hals


WILMINGTON, Del. (Reuters) –     Billionaire entrepreneur Elon Musk is seeking documents from Twitter Inc co-founder Jack Dorsey as the CEO of Tesla and SpaceX pursues his legal fight to walk away from his $44 billion deal for the social media co*pany, according to a court filing.


Dorsey, who resigned as Twitter’s chief executive in November and left the board in May, was asked for documents and co*munications about Musk’s April agreement to buy the co*pany and about spam accounts on the platform, according to a copy of the subpoena.


Dorsey, who is CEO of payments processing co*pany Block Inc, did not immediately respond to a request for co*ment. Block was co-founded by Dorsey and changed its name last year from Square Inc.


Musk, the world’s richest person due to his stake in Tesla Inc, told Twitter in July he was ending the agreement to buy the co*pany for $54.20 per share because he alleged Twitter had violated the deal contract. Twitter and Musk have since sued each other, with Twitter asking a judge on the Delaware Court of Chancery to order Musk to close the deal. A five-day trial is set to start on Oct. 17.


The subpoena sought documents and co*munications about Twitter’s use of mDAU, a measure of active users on its platform. Musk has alleged the co*pany defrauded him by hiding the number fake accounts in its regulatory filings, which Musk said he used to value the co*pany.


Twitter has denied Musk’s spam allegations.


Musk also wanted documents and co*munications regarding alternative measures of active users that the co*pany has considered and information about the use of mDAU in executive pay and annual targets.


Twitter declined to co*ment.


Dorsey had supported Musk’s buyout offer for Twitter as the two men have agreed on the need for more transparency for its algorithm and allowing users more control over the content they see.


Dorsey has also tweeted that he believes Twitter is held back by the advertising model and Musk has said Twitter should rely more on subscription fees and services such as money transfers between users.


Musk and Dorsey held discussions in March about Musk joining the Twitter board before Musk revealed he had acquired a 9.1% stake in Twitter. Musk accepted a board seat but before he began his term, he changed course and offered to buy the co*pany.


Shares of Twitter were down 2.5% at $42.89 in late Monday trade.



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


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