Musk seeks documents from Jack Dorsey in fight over Twitter deal

By Tom Hals

WILMINGTON, Del. (Reuters) – Billionaire entrepreneur Elon Musk is looking for paperwork from Twitter Inc co-founder Jack Dorsey because the CEO of Tesla and SpaceX pursues his authorized struggle to stroll away from his $44 billion deal for the social media firm, in accordance with a court docket submitting.

Dorsey, who resigned as Twitter’s chief government in November and left the board in Could, was requested for paperwork and communications about Musk’s April settlement to purchase the corporate and about spam accounts on the platform, in accordance with a duplicate of the subpoena.

Dorsey, who’s CEO of funds processing firm Block Inc, didn’t instantly reply to a request for remark. Block was co-founded by Dorsey and altered its title final yr from Sq. Inc.

Musk, the world’s richest individual attributable to his stake in Tesla Inc, advised Twitter in July he was ending the settlement to purchase the corporate for $54.20 per share as a result of he alleged Twitter had violated the deal contract. Twitter and Musk have since sued one another, with Twitter asking a choose on the Delaware Courtroom of Chancery to order Musk to shut the deal. A five-day trial is ready to start out on Oct. 17.

The subpoena sought paperwork and communications about Twitter’s use of mDAU, a measure of lively customers on its platform. Musk has alleged the corporate defrauded him by hiding the quantity pretend accounts in its regulatory filings, which Musk mentioned he used to worth the corporate.

Twitter has denied Musk’s spam allegations.

Musk additionally needed paperwork and communications relating to different measures of lively customers that the corporate has thought-about and details about the usage of mDAU in government pay and annual targets.

Twitter declined to remark.

Dorsey had supported Musk’s buyout supply for Twitter as the 2 males have agreed on the necessity for extra transparency for its algorithm and permitting customers extra management over the content material they see.

Dorsey has additionally tweeted that he believes Twitter is held again by the promoting mannequin and Musk has mentioned Twitter ought to rely extra on subscription charges and providers akin to cash transfers between customers.

Musk and Dorsey held discussions in March about Musk becoming a member of the Twitter board earlier than Musk revealed he had acquired a 9.1% stake in Twitter. Musk accepted a board seat however earlier than he started his time period, he modified course and supplied to purchase the corporate.

Shares of Twitter had been down 2.5% at $42.89 in late Monday commerce.

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