WILMINGTON, Del., Aug 22 (Reuters) – Billionaire entrepreneur Elon Musk is seeking documents from Twitter.(TWTR.N) Tesla and SpaceX co-founder Jack Dorsey have continued a legal battle to walk away from a $44 billion deal for the social media giant.
Dorsey, who resigned as Twitter’s chief executive in November and left the board in May, according to a copy of the subpoena, seeking documents and communications about Musk’s April deal to buy the company and spam accounts on the platform.
Dorsey, CEO of payments processing firm Block Inc., did not immediately respond to a request for comment. Black was co-founded by Dorsey and changed its name from Square Inc last year(SQ.N).
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Musk, the world’s richest man because of his stake in Tesla Inc, told Twitter in July that he was closing a deal to buy the company for $54.20 a share after Twitter was accused of breaching the deal. Twitter and Musk sued each other, with Twitter asking a judge in the Delaware Court of Chancery to order Musk to close the deal. The five-day trial is scheduled to begin on Oct. 17.
The subpoena sought documents and communications about Twitter’s use of mDAU, a measure of active users on its platform. Musk accused the company of defrauding him by hiding the number of fake accounts in its regulatory filings, which Musk said he respects.
Twitter has denied Musk’s spam allegations.
Musk also wanted documents and communications about alternative measures of active users that the company considered, and information about using mDAU in executive pay and annual targets.
Twitter declined to comment.
Dorsey supported Musk’s buyout offer for Twitter because the two agreed its methodology needed more transparency and allowed users more control over the content they saw.
Dorsey also tweeted that he believed Twitter was being held back by the advertising model, and Musk said Twitter should rely more on services like subscription fees and money transfers between users.
Musk and Dorsey held discussions in March about Musk joining the Twitter board, before Musk revealed he had bought a 9.1% stake in Twitter. Musk accepted a board seat, but before he began his tenure, he reversed course and offered to buy the company.
Shares of Twitter fell 2.5% to $42.89 in Monday trading.
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Reporting by Tom Halls in Wilmington, Delaware; Additional reporting by Katie Paul in San Francisco; Sheila Tang in Dallas; Editing by David Gregorio
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