Ken Paxton, the Attorney General of Texas, launched an investigation on Monday into whether or not there is a cover-up of the problem of fake accounts. The same types of data on fake accounts that Musk hasn't been able to get was demanded in a letter by the state of Texas.
In recent weeks, there has been intense scrutiny on the claims that less than 5 percent of users are bots, when they may in fact comprise as much as 20 percent or more. According to the press release, an inaccurate estimate of bot accounts may "inflate the value of the company and the costs of doing business with it."
The "intense scrutiny" has been driven by Musk's claim that the account estimate is incorrect. Musk agreed to pay $54.20 per share, and the stock price was $39.59, despite the fact that he was trying to get out of the deal.
The investigation was launched hours after Musk threatened to pull out of his purchase of the company because it wouldn't give him the data he wanted. The US Supreme Court blocked the Texas law from taking effect last week.
Musk's press release wrongly described the account estimate. Less than 5 percent of all users are bots, according to the social network. According to the company, less than 5 percent of daily active users are fake or fake accounts.
AdvertisementThe Civil Investigative Demand his office sent is more precise than the announcement. There are 23 types of documents that it asks for, including ones that show the average number of daily active users and the number of inauthentic accounts.
The demand letter seems to assume that the mDAU stat is not true. The 13th of its demands is for documents that show that less than 5% of false or fake accounts are included in the metric. "Your" is capitalized in the letter and used in a different way.
The Texas Deceptive Trade Practices Act gives the state's attorney general the authority to demand documents from companies.
Texans rely on public statements that most of the users are real people. It's important for businesses and advertisers in Texas who useTwitter. I have a duty to protect Texans if there is a misrepresentation of how many accounts are real.
When contacted by Ars today, they were not able to comment on the Texas investigation. The company said yesterday that it will enforce the agreement at the original price.
In accordance with the terms of the merger agreement, the company will continue to share information with Musk. The agreement is in the best interests of all shareholders. The transaction will be closed and the merger agreement will be enforced.
Musk claims he is entitled to more data because it is necessary to facilitate the closing of the deal. Musk said he has the right to end the merger agreement because he needs the data to get financing.
Under certain circumstances, Musk won't be able to get out of the deal for less than $1 billion, even if he kills it. A specific performance provision in the merger deal says that if the Equity Investor is able to fund the Equity Financing directly, it will entitle the company to specific performance or other equitable remedy.
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