A new subpoena from Twitter Inc TWTR is requesting information from friends of Elon Musk in the battle between the social media platform and Tesla Inc TSLA over a proposed $44 billion buyout. Here’s the latest.
What Happened: A subpoena obtained by The Washington Post sees Twitter targeting several investors connected to Musk.
The subpoena issued Monday by Twitter’s legal team asked for information from investors that include Chamath Palihapitiya, David Sacks, Joe Lonsdale, Steve Jurvetson, Marc Andreessen, Jason Calacanis and Keith Rabois. Twitter also issued subpoenas on Credit Suisse CS and Morgan Stanley MS, two banks involved in the deal financing.
Several of the names in the subpoena were not previously known to have been involved in the Musk and Twitter deal, and others may have been part of funding lined up by the Tesla CEO to get the deal to the finish line. The Washington Post mentions Calacanis and Andreessen, known as involved in the financing of the deal.
Items included in the subpoena that are asked for are “checklists, timelines, presentations, decks, organizational calls, meetings, notes, recordings” that are all related to financing the Twitter buyout.
The subpoena also asks for information from the All-In Summit 2022, which was held in Miami in May. The All-In Podcast includes Palihapitiya, Calacanis, Sacks and David Friedberg, who was not named in the subpoena. Musk spoke at the event via videoconference.
Speaking at the event, Musk expressed concerns over buying Twitter and said he could see a lower price to buyout the company with accusations of misleading him over user numbers. Musk compared buying Twitter to buying a house with a termite problem at the All-In Summit.
Why It’s Important: Calacanis and Sacks are friends with Musk, according to the Washington Post. Sacks previously worked with Musk at PayPal Holdings Inc PYPL. Rabois also served as a PayPal executive previously.
Jurvetson is a friend of Musk and serves on the Board of Directors for SpaceX. Jurvetson previously served on the Tesla Board of Directors from 2006 to 2020.
Lonsdale co-founded Palantir Technologies PLTR with Peter Thiel, who is well-connected to Musk. Lonsdale was also a speaker at the All-In event. In a tweet Monday, Lonsdale called the subpoena a harassing maneuver.
“I have nothing to do with this aside from a few snarky comments, but got a ‘YOU ARE HEREBY COMMANDED’ document notice,” Lonsdale tweeted mentioning the subpoenas sent to “friends in the ecosystem” of Musk.
Palihapitiya is part of the All-In Podcast and was also a previous investor in Tesla.
Andreessen is the co-founder of venture capital company Andreessen Horowitz.
The report from The Washington Post said Calacanis launched an investing pool in the spring aimed at investors putting in a minimum of $250,000. The deadline for the pool was several days before the All-In Summit, which could lead to speculation of involvement in Twitter financing.
A law professor from the University of California at Berkeley chimed in with some potential reasons for the subpoena.
“There are a couple things that Twitter is probably looking for here. The first would be anything nice Musk said about Twitter to encourage people to participate in the equity financing,” Adam Badawi said. “The second would be anything he said that contradicts his public statements about bots.”
Badawi said most venture capitalists have portfolios of companies that are incorporated in Delaware, which will lead to cooperation with the request.
“If there are documents or conversations relevant to this dispute, these subpoenas will probably bring them to light.”
The push for information from those in Musk's circle is likely connected to seeing if Musk paints the same negative light on Twitter bot issues privately as he does publicly.
TWTR Price Action: Twitter shares are up 0.5% to $41.09 on Tuesday.
Photo: Created with an image from Daniel Oberhaus via Flickr
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