Twitter Inc. was ordered to provide additional information about spam and bot accounts to Elon Musk. Tesla CEO has been sued by the social media giant for terminating his $44 million offer to purchase the social media platform. The U.S. Securities and Exchange Commission has also questioned Twitter regarding the number of spam accounts.
Kathaleen St. J. McCormick is a Delaware Court of Chancery judge who signed an order Thursday that required Twitter Inc. (NYSE) to provide additional information to Elon Musk, CEO of Spacex, and Tesla Inc. Plaintiff Twitter sued Musk and his companies, X Holdings I, and X Holdings II for ending the \$44 million deal to purchase the social media platform. Musk has countersued Twitter.
In her order, Judge McCormick stated:
Data requests from defendants are made in foreign languages.
She said: “Read literally. Defendants’ documents would require Plaintiff to produce trillions upon billions of data points reflecting all the data Twitter might store for each of its 200 million accounts every day on every 3 years.
According to the social media company, monetizable daily active user (mDAU), is defined as “Twitter users that logged in and accessed Twitter through Twitter.com or Twitter apps that allow you to show ads.”
Plaintiff is required to produce a subset Defendants requested. These are the 9,000 accounts that were reviewed in connection to Plaintiff’s Q4-2021 audit. The parties call this the ‘historical snap’.
Plaintiff claimed that these documents could be produced in less than two weeks if they put in a lot of effort. Plaintiff will work to meet this deadline. Plaintiff must also produce sufficient documents to show how the 9,000 accounts were chosen for review,” the order details.
According to a Wednesday regulatory filing, the U.S. Securities and Exchange Commission has begun an investigation into Twitter’s method of identifying spam accounts.
Parag Agrawal, the CEO of Twitter, was asked by the SEC to explain how Twitter calculates bot accounts in a letter dated 15 June. “We note that your estimate of the average number false or spam accounts in fiscal 2021 remains below 5% of the mDAU,” added the SEC.
Please disclose, to the extent possible, the method used in computing these figures as well as the assumptions and judgments made by management.
Twitter replied to the SEC inquiry on June 22 with a standard description about its methodology. The social media giant told the securities regulator it had “adequately” revealed its methodology, noting that thousands of accounts are randomly selected to be reviewed each quarter by people.
On July 27, the SEC sent another email to Twitter, stating that it had completed its review of all your filings. We remind you that the company’s management and the company are responsible for the accuracy of their disclosures. This applies regardless of any staff review, comments, actions, or inactions.
Musk sold 8 million shares of Tesla stock earlier this month. The Tesla boss stated that in case Twitter makes the buyout agreement impossible and other equity partners fail to come through, it is crucial to avoid an emergency sale.