the money game

Elon Musk Is ‘So Sick of Stuff Like This’: 8 Things to Know About His Response to Twitter

Photo: Jim Watson/AFP via Getty Images

Late Thursday, Elon Musk filed his response to Twitter’s lawsuit in Delaware Chancery Court trying to compel him to buy the company for $44 billion, and it was finally made public Friday morning. The whole legal drama is a mess. Could a suit initiated by one of the most chaotic social networks against the supremely unpredictable centibillionaire, where both are claiming the other isn’t being fully truthful, be any other way?

The gist of Musk’s response closely tracks arguments he’s made before in public filings, and while it doesn’t add much to his overall argument, it’s now further colored by Twitter’s response, which came out before Musk’s filing was publicly released. (The full text is here, provided by the Chancery Daily.) For the Tesla technoking, it’s still all about the bots, though. Here’s what Musk’s latest salvo reveals:

Lots of pages, but not a lot of new material. A week ago, when Musk filed his 165-page response, the sheer volume of the filing made it seem like there would be some smoking gun, or some novel argument, that would add something new to bolster his lawsuit. After all, Twitter had handed over more than 49 tebibytes of data, and you’d figure that something in that big spreadsheet of tweets, likes, and everything else would yield at least the basis for his claims. But much of this is warmed-over arguments that he’s made before, high-handed bromides about the importance of free speech that are quite literally next to his arguments that bots are destructive. (Musk may yet need to grapple with how bots can be a First Amendment issue.)

What’s new is shaky. Musk makes the claim that, contrary to Twitter’s statement that spambots account for less than 5 percent of its most active users, “false or spam accounts accounted for 33 percent of visible accounts.” How does he come to this conclusion? It’s based on a single week’s worth of data in early July that, he claims, is drawn from 30 percent of the pool that makes up Twitter’s mDAU (monetizable daily active users; basically, people — or bots — who use the platform frequently). Musk is also apparently relying on a website called the Botometer, which recently labeled his own account as highly likely to be a bot, according to Twitter’s response to this. For what it’s worth, this analysis suggests the number of fake accounts that saw ads could be as high as 14 percent.

Twitter isn’t so great at making money. Musk points to internal Twitter data that shows, incredibly, that about a third of all users don’t see ads (especially those who access it on a third-party app), and another 41 percent see very few. Most of the company’s ad revenue is driven by 7 percent of users. (Twitter doesn’t really deny this.) So, yeah, the widely held view that Twitter sucks at making money seems to be correct. In fact, this is why there’s a long history of billionaires trying to acquire large chunks of stock in the company — because of the potential for making more money than the current management team.

Musk goes after Twitter’s CFO. Ned Segal, Twitter’s top financial officer, is mentioned 16 times in the filing. Team Musk is trying to cast him as a bad guy, someone who doesn’t care about whether there’s spam on Twitter or not. Here’s one mention: “Twitter executive Ned Segal admitted during Twitter’s July 1, 2022 call with the Musk Parties that the quarter-end average mDAU it reports to investors includes these millions of suspended accounts within it.” Musk goes on to claim that Segal is unclear if some accounts are bots or not. (Twitter, for its part, denies this, saying that it “immediately removes accounts identified as false or spam from its mDAU counts on a going-forward basis.”)

Musk texted Twitter’s CEO a scammy crypto tweet. Since Musk has made bots a key issue with his attempt to walk away from the deal, key to his legal argument is showing that it’s actually something he cared about. To that, Musk presents an April 8 text to Parag Agrawal, the current CEO of Twitter, where he complains about a scammy crypto tweet that included @elonmusk. “I am so sick of stuff like this,” he texted the CEO at 10:10 p.m. Agrawal responded with “we should be catching this,” but it’s not clear what really happened beyond that.

You may have to pay for Twitter. The crux of Musk’s argument is that its most active user base — which Twitter characterizes as mDAU — is inflated. Musk says his business plan, which would have charged a “nominal” fee for users, is now broken because he doesn’t know how many actual users it truly has. The upshot here is that, if Twitter gets its way and sells itself, it may have to become something closer to Raya than TikTok.

Musk’s free-speech argument gets muddled. The world’s richest man claims that he was motivated to take over Twitter because it has attempted to solve spam and misinformation issues through content moderation and suspending bots. Here he is on free speech: “But to Musk, and many others, eliminating free speech is a cure worse than the disease, and that open discourse is essential to a functioning democracy.” And here he is just a few sentences later: “Musk believes that by verifying who is real, and eliminating false and spam accounts — accounts that bad actors employ to manipulate public discourse or propagate scams on a global scale — Twitter would be able to flourish.”

Twitter has been pretty effective at trolling Musk in court. Musk has so far failed three times to get what he wants in the early hearings of the case Twitter filed on July 12. First, he tried to get the trial delayed until next year, citing the voluminous amount of data his side said it needed to go through. That didn’t work, and the trial starts on October 17. Then, after filing his answer under seal, his team tried to get a public version made available on Wednesday, only to have the judge overseeing the case, Chancellor Kathaleen McCormick, side with Twitter for more time to make redactions of sensitive private data. Third: Twitter then took advantage of that extra time to preempt Musk’s counterclaim with its own response, essentially getting a head start on how this is framed in the public eye — something Musk tried to head off. The kicker? It didn’t even redact anything, according to a separate public filing the company made Friday — which also includes a new, fuller public explanation of how it measures its monetizable user base. This is what trolling looks like in Delaware Chancery Court, apparently.

8 Things to Know About Elon Musk’s Response to Twitter