Twitter is suing Elon Musk for trying to end the deal

Elon Musk – Credit: Susan Walsh/AP Photo

Twitter officially lodged a complaint Elon Musk after deciding to end $44 billion contract he signed to buy the social media platform earlier this year.

The suitwhich was obtained and shared by NPRwas filed in the Delaware Court of Chancery on Tuesday, July 12. He accuses Musk of reneging on the contract he signed to buy Twitter because it “no longer serves his personal interests”, adding: “Musk apparently believes that he – unlike all other parties subject to Delaware contracts – is free to change its mind, trash the company, disrupt its operations, destroy shareholder value and walk away.

More from Rolling Stone

Twitter’s purpose, the lawsuit says, is “to bar Musk from further violations, compel Musk to fulfill his legal obligations, and compel completion of the merger upon satisfaction of a few outstanding conditions.”

Musk’s lawyers did not return immediately rolling stoneMusk’s request for comment – and Musk himself had not tweeted about the lawsuit at the time of publication.

The highly anticipated trial came just days later Musk announced he was backing down of the Twitter agreement. In a July 8 letter to Twitter’s chief legal officer, Musk’s team said he was “terminating” the agreement due to a “material breach” of the agreement and “false and misrepresentations.” misleading” made by Twitter prior to the deal. Those violations, says Muskinvolve the proliferation of spambots on the platform, with Musk accusing Twitter of withholding data and information it deems necessary to assess how prevalent spam accounts are on Twitter.

Twitter, for its part, has publicly estimated that 5% of daily users who see ads are bots or spam accounts, although it admits that could be higher. Musk claimed that number could be as high as 20%, but even if it did, such a disparity in the data may not be enough to allow Musk to walk away from the deal without penalty.

In the lawsuit, Twitter accused Musk of wanting to terminate the deal because of the major stock market downturn, which has hit tech companies particularly hard — like Musk’s Twitter and Tesla. The deal reached in late April required Musk to buy Twitter at $54.20 per share (for a total of $44 billion); Twitter’s stock price has since fallen and currently sits around $34.06 at press time.

Amid this downturn, according to Twitter’s lawsuit, Musk “repeatedly disparaged Twitter and the deal, creating business risk for Twitter and downward pressure on its stock price.” He goes on to call Musk’s fake account strategy a “pattern of hypocrisy,” noting his previous comments about wanting to buy Twitter and make it private to actually get rid of fake accounts.

“But when the market declined and the fixed-price deal became less attractive, Musk changed his narrative, suddenly demanding ‘verification’ that spam was not a serious issue on Twitter’s platform and claiming an urgent need for ‘diligence’ which he expressly perjured,” the suit reads.

Twitter also dismissed Musk’s accusation in the letter terminating the deal, saying his claims “are pretexts and have no basis.” He says Twitter has “delivered on its commitments”, while Musk “has been acting against this deal since the market started to turn and has repeatedly violated the merger agreement in the process”.

Twitter, like The New York Times note, aims to have his case heard in a four-day trial in September. Although the deal is technically due to close by Oct. 24, a six-month extension could be allowed if both parties are still awaiting regulatory approval.

The best of Rolling Stone

Click here to read the full article.

Comments are closed.