Twitter Sues Binance And A Dozen Other Companies Over $44 Billion Musk Deal

Bankers and advisers who backed Tesla (TSLA) CEO Elon Musk’s $44 billion bid on Twitter (TWTR) have been hit by a flood of new subpoenas from the social media site’s lawyers. Those lawyers want to know what happened in Musk’s private negotiations that led to the now-controversial deal.

Twitter filed more than a dozen subpoenas Tuesday in its expedited lawsuit to force Musk to go through with the deal. The filings addressed to Musk’s advisors and potential lenders — including Binance, Factorial Funds, Benefit Street, Bandera Partners, Founders Fund Growth II Management — add to several others issued Monday to Musk’s bankers, investors and associates. Tesla (TSLA) and SpaceX also received similar requirements.

Specifically, the subpoenas demand that Musk’s advisers and funders hand over documents and communications that support or refute Musk’s suggestion that Twitter underreported the number of fake or “spam” accounts on the social media site.

Musk claims he is pulling out of the deal because Twitter is not providing him with data on the number of fake accounts, known as bots, operating on his platform — and in some cases spreading misinformation. According to Musk, Twitter’s public statements about the prevalence of bots are misleading, and more than the estimated less than 5% of mDAUs or daily active users to monetize.

Twitter, on the other hand, says it has long argued that its estimate could be wrong, and that Musk’s bot problem is a pretext to pull out of the deal. Twitter adds that Musk also deliberately tried to undo the deal with a series of disparaging tweets.

ANKARA, TURKIYE - APRIL 18: In this photo illustration, the Twitter profile of Tesla and SpaceX CEO Elon Musk is displayed on a cell phone screen in Ankara, Turkiye on April 18, 2022. Twitter has announced that it is accepting Elon's offer. Musk has accepted to buy for $44 billion.  (Photo by Celal Gunes/Anadolu Agency via Getty Images)

In this photo illustration, the Twitter profile of Elon Musk, CEO of Tesla and SpaceX, is displayed on a mobile phone screen in Ankara, Turkiye on April 18, 2022. Twitter has announced that it has declined Elon Musk’s offer to buy for $44 billion. (Photo by Celal Gunes/Anadolu Agency via Getty Images)

In separate subpoenas addressed to Binance and others, Twitter is asking the companies to hand over all documents and communications related to Musk’s May 15 Tweet alleging that there is “any chance” that Twitter’s percentage of bots and/or false or spam accounts “more than 90% are from daily active users.”

Twitter post from @elonmusk and @BLKMDL3 accounts on May 15, 2022

Twitter post from @elonmusk and @BLKMDL3 accounts on May 15, 2022

The request goes on to demand all documents related to another Musk Tweet on May 17 that reads, “20% fake/spam accounts, while 4 times what Twitter claims could be much higher.”

Twitter post from @elonmusk's account on May 17, 2022

Twitter post from @elonmusk’s account on May 17, 2022

The subpoenas further demand that the companies “design or recreate plans” regarding Twitter’s fake or spam accounts, along with all media communications about spam accounts and documents about Twitter’s SEC spam disclosures.

While Twitter’s attorneys insist that under the merger agreement, the company was not required to hand over the bot data it requested, its attorneys wrote in a July 8 letter to end the deal that Musk needed the fake account information for his funding.

The bot information, Musk’s attorneys wrote, is needed to “facilitate Musk’s financing and financial planning for the transaction and to participate in transition planning for the company…”

On Musk’s part, his lawyers have also issued subpoenas seeking information regarding Twitter’s end of the transaction. His attorneys have issued subpoenas to Goldman Sachs and JPMorgan, as well as boutique investment bank Allen & Co.

Twitter’s subpoena requests on Monday sought documents and communications from Musk’s associates and investors, including Silicon Valley investors Chamath Palihapitiya, David Sacks, Joe Lonsdale, Steve Jurvetson, Marc Andreessen, Jason Calacanis, Keith Rabois; and from financial advisors Credit Suisse and Morgan Stanley.

A judge in Delaware Chancery Court has granted Twitter a five-day trial in the case, which is expected to begin October 17.

Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.

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