TWTR Stock: Why Did Twitter Just Subpoena Hedge Fund Giant Ken Griffin?

  • Twitter (TWTR) just subpoenaed Ken Griffin for his financing involvement with the failed Twitter acquisition.
  • Meanwhile, Tesla (TSLA) CEO Elon Musk has filed a countersuit toward the social media platform.
  • Shares of TWTR stock are down about 2% year-to-date (YTD).
Twitter (TWTR) logo displayed on a smartphone screen with a hand ready to use the app

Ken Griffin and Citadel are in focus today after Twitter (NYSE:TWTR) issued the hedge fund manager a subpoena. Griffin founded Citadel in 1990. Today, the hedge fund manages more than $480 billion in 13F securities.

Citadel currently owns call options, put options and common shares of both Tesla (NASDAQ:TSLA) and Twitter. However, the subpoena was issued directly toward Griffin, not Citadel.

Griffin received the subpoena due to his “actual or potential” involvement with Tesla CEO Elon Musk’s financing plans to acquire Twitter. Let’s get into the details.

TWTR Stock: Twitter Subpoenas Ken Griffin

The subpoena asks for information and communications related to the Musk acquisition. Twitter is also seeking information from “more than a dozen investment firms” that were involved with Musk’s proposed financing plan.

Servers attempted to deliver the subpoena to Citadel’s New York office and Griffin’s Manhattan residence. The New York office declined to accept the subpoena, stating that it should be delivered to the Chicago office. At his residence, a doorman accepted the subpoena, but stated that Griffin was currently not present. A spokesperson for Griffin declined to comment on the situation.

In addition to Griffin, Twitter also subpoenaed cryptocurrency exchange Binance (BNB-USD). The exchange invested $500 million into Musk’s $7.1 billion equity raise in May.

Musk Countersues Twitter

Meanwhile, Musk is countersuing Twitter. The CEO accuses Twitter of misrepresenting the health of its business and several key metrics. In a court filing, Musk explained:

“Twitter’s own disclosures to the Musk parties show that although Twitter touts having 238 million ‘monetizable daily active users,’ those users who actually see ads (and thus, would reasonably be considered ‘monetizable’) is about 65 million lower than what Twitter represents.”

In response, the social media platform says Musk’s accusations are implausible. It also says Musk “doesn’t have the right to back out of the deal” based on his bot account worries.

Musk believes that Twitter’s internal bot estimate of less than 5% of users is largely inaccurate. In his own analysis, the Tesla CEO concluded that at least 10% of Twitter’s monetizable daily active users are bots. Twitter claims Musk’s bot figure is inaccurate because it uses different data.

The five-day trial between Elon Musk and Twitter is set to start on Oct. 17. In the meantime, all eyes are on TWTR stock.

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 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.

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