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TWTR Stock Alert: What to Know as Elon Musk Subpoenas the Twitter Whistleblower

  • CEO Elon Musk just subpoenaed Twitter (TWTR) whistleblower Peiter Zatko.
  • Zatko claims that the social media platform has fallen short on privacy, content moderation and bot removal.
  • TWTR stock is down about 6% year-to-date (YTD).
Twitter (TWTR) logo displayed on a smartphone screen with a hand ready to use the app
Source: shutterstock.com/khak

Twitter (NYSE:TWTR) stock is in focus today following an update in the case versus Tesla (NASDAQ:TSLA) CEO Elon Musk. Last week, former Twitter Head of Security Peiter Zatko emerged as a whistleblower. Zatko accuses the social media platform of “extreme, egregious deficiencies” related to privacy and content moderation. He also alleges that Twitter misled Musk when it provided information in regards to his acquisition and that Twitter executives are not incentivized to detect and remove bots.

Musk claims that Twitter bots account for more than 5% of all users while the company says bots account for less than 5%. Meanwhile, Zatko says an accurate representation of the bots would “harm the image and valuation of the company.”

Zatko filed complaints to three federal agencies, including the U.S. Securities and Exchange Commission (SEC). Now, Elon Musk and his legal team are subpoenaing Zatko for more information. Let’s get into the details.

TWTR Stock: Musk Subpoenas Twitter Whistleblower

Zatko is scheduled to be deposed for the subpoena on Sept. 9. Musk’s legal team has asked for documents related to Twitter’s bot figure, as well as the impact of bots on the business. The team has also asked for documents related to alleged attempts to hide security weaknesses and any unlawful activity. Findings from the deposition will likely provide some guidance on the upcoming trial in Delaware’s Chancery court on Oct. 17.

Nicknamed “Mudge,” Zatko is a well-known figure in the cybersecurity world. After filing the complaint, many experts rushed to endorse his background and track record. For example, veteran cybersecurity journalist Kim Zette recently tweeted that there was “probably no security exec with more ethics, more credibility than Mudge.”

On the other hand, one Twitter attorney recently stated that Musk’s focus on bots as a way to walk back his acquisition is “legally irrelevant.” The attorney explained that Twitter’s internal bot count is just an estimate and not a binding representation.

If Twitter is successful in the upcoming lawsuit, it may force Musk to acquire the company at $54.20 per share. There is also speculation that Musk may be able to purchase the company at a lower price as a result of the case.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.


Article printed from InvestorPlace Media, https://investorplace.com/2022/08/twtr-stock-alert-what-to-know-as-elon-musk-subpoenas-the-twitter-whistleblower/.

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