Twitter sued Tesla CEO Elon Musk on Tuesday, trying to force him to complete his $44 billion takeover of the social media company by accusing him of B次元官网网址渙utlandishB次元官网网址� and B次元官网网址渂ad faithB次元官网网址� actions that have caused the platform irreparable harm and B次元官网网址渨reaked havocB次元官网网址� on its stock price.
Back in April, Musk pledged to pay $54.20 a share for Twitter, which agreed to those terms after reversing its initial opposition to the deal. But the two sides have been since the billionaire said Friday that he was backing away from his agreement to buy the company.
TwitterB次元官网网址檚 lawsuit opens with a sharply-worded accusation: B次元官网网址淢usk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.B次元官网网址�
B次元官网网址淗aving mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he B次元官网网址� unlike every other party subject to Delaware contract law B次元官网网址� is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away,B次元官网网址� the suit stated.
Twitter in the Delaware Court of Chancery, which frequently handles business disputes among the many corporations, including Twitter, that are incorporated there.
As part of the April deal, Musk and Twitter had agreed to pay each other a $1 billion breakup fee if either was responsible for the deal falling through. The company could have pushed Musk to pay the hefty fee but is going farther than that, trying to force him to complete the full $44 billion purchase approved by the companyB次元官网网址檚 board.
B次元官网网址淥h the irony lol,B次元官网网址� Musk tweeted after Twitter filed the lawsuit, without explanation.
The arguments and evidence laid out by Twitter are compelling and likely to get a receptive ear in the Delaware court, which doesnB次元官网网址檛 look kindly on sophisticated buyers with highly-paid legal advisers backing off of deals, said Brian Quinn, a law professor at Boston College.
B次元官网网址淭hey make a very strong argument that this is just buyerB次元官网网址檚 remorse,B次元官网网址� Quinn said. B次元官网网址淵ou have to eat your mistakes in the Delaware Chancery Court. ThatB次元官网网址檚 going to work very favorably for Twitter.B次元官网网址�
Musk alleged Friday that Twitter has failed to provide enough information about the number of fake accounts on its service. Twitter said last month that it was making available to Musk a B次元官网网址砯ire hoseB次元官网网址� of raw data on hundreds of millions of daily tweets.
READ MORE:
The company has said for years in regulatory filings that it believes about 5% of the accounts on the platform are fake. Musk is also alleging that Twitter broke the acquisition agreement when it fired two top managers and laid off a third of its talent-acquisition team.
TwitterB次元官网网址檚 suit repeatedly emphasizes MuskB次元官网网址檚 contemplation of starting a Twitter competitor B次元官网网址� an alternative option he sometimes aired publicly and sometimes privately to TwitterB次元官网网址檚 executives and board members. While the company has said it cooperated in providing the data he requested on fake B次元官网网址渟pam botB次元官网网址� accounts, the lawsuit suggests Twitter was concerned that disclosing too much B次元官网网址渉ighly sensitive informationB次元官网网址� could expose the company to competitive harm if shared.
The biggest surprise for Quinn was how much evidence Twitter has B次元官网网址� for instance, communications with Musk about whether to retain or lay off employees, as well as the billionaireB次元官网网址檚 own public tweets B次元官网网址� to reject his arguments for backing out.
B次元官网网址淭hey are marshaling many of MuskB次元官网网址檚 own tweets to hoist him on his own petard,B次元官网网址� he said.
In a joint press release announcing the acquisition deal, Musk pledged to B次元官网网址渦nlockB次元官网网址� the social media companyB次元官网网址檚 potential by loosening restrictions on speech and rooting out fake accounts. Among his most attention-grabbing promises was to let former President Donald Trump back onto the platform. Musk argued that TwitterB次元官网网址檚 ban of Trump following the Jan. 6, 2021 insurrection at the U.S. Capitol was B次元官网网址渕orally badB次元官网网址� and B次元官网网址渇oolish in the extreme.B次元官网网址�
But his confidence didnB次元官网网址檛 last long. TeslaB次元官网网址檚 stock B次元官网网址� MuskB次元官网网址檚 primary source of wealth B次元官网网址� plummeted amid a broader stock market selloff in May, and Musk soon seemed less enthusiastic about owning Twitter.
B次元官网网址淔or Musk, the best case is he pays the $1 billion breakup fee but that appears very unlikely,B次元官网网址� said Wedbush Securities analyst Daniel Ives. B次元官网网址淭he irony is that Twitter as a fiduciary is clearly looking to enforce a deal that Musk doesnB次元官网网址檛 want to get done. ItB次元官网网址檚 like buying a house you donB次元官网网址檛 want.B次元官网网址�
TwitterB次元官网网址檚 suit calls MuskB次元官网网址檚 tactics B次元官网网址渁 model of hypocrisy,B次元官网网址� noting that he had emphasized plans to take Twitter private in order to rid it of spam accounts. Once the market declined, Twitter said, B次元官网网址淢usk shifted his narrative, suddenly demanding B次元官网网址榲erificationB次元官网网址� that spam was not a serious problem on TwitterB次元官网网址檚 platform, and claiming a burning need to conduct B次元官网网址榙iligenceB次元官网网址� he had expressly forsworn.B次元官网网址�
Similarly, the company charges that Musk operated in bad faith, accusing him of requesting company information in order to accuse Twitter of providing B次元官网网址渕isrepresentationsB次元官网网址� about its business to regulators and investors.
Musk B次元官网网址渉as been acting against this deal since the market started turning, and has breached the merger agreement repeatedly in the process,B次元官网网址� the suit charged. B次元官网网址淗e has purported to put the deal on B次元官网网址榟oldB次元官网网址� pending satisfaction of imaginary conditions, breached his financing efforts obligations in the process, violated his obligations to treat requests for consent reasonably and to provide information about financing status, violated his non-disparagement obligation, misused confidential information, and otherwise failed to employ required efforts to consummate the acquisition.B次元官网网址�
Matt OB次元官网网址檅rien, The Associated Press
Like us on and follow us on
