Musk and Twitter have been preparing for a legal fight since the billionaire said Friday he was withdrawing from his April deal to buy the company.
Twitter’s lawsuit opens with a strong accusation: “Musk refuses to fulfill his obligations to Twitter and its shareholders because the agreement he signed no longer serves his personal interests.”
Elon Musk said the number of bot accounts was much higher than Twitter had initially claimed. (AP)
“After putting on a public show to put Twitter into play, and having proposed and signed a seller-friendly merger agreement, Musk believes that, unlike all other parties subject to Delaware contract law , is free to change its mind, leave the garbage. company, interrupt its operations, destroy the value of shareholders and leave, “says the lawsuit.
Twitter filed its lawsuit in the Delaware Chancellery Court, which often handles business disputes between the many corporations, including Twitter, that join it.
Musk alleged Friday that Twitter has not provided enough information about the number of fake accounts on its service. Twitter said last month that it was making available to Musk a “fire hose” of raw data on hundreds of millions of tweets a day.
Elon Musk is being sued by Twitter. (AP)
The company has said for years in regulatory documents that it believes about 5 percent of the platform’s accounts are fake. Musk also alleges that Twitter broke the acquisition deal when it fired two senior executives and fired a third of its talent acquisition team.
Twitter’s lawsuit repeatedly emphasizes Musk’s contemplation of starting a Twitter competitor, an alternative option that he sometimes issued publicly and sometimes privately to Twitter executives and board members. Although the company has said it cooperated to provide the data from the spam bot it requested, the lawsuit suggests there was concern that revealing too much “very sensitive information” could expose Twitter to competitive harm if share.
When Musk offered to buy the company and take it private in mid-April, the board initially tried to block it by deploying a financial maneuver that would have made the acquisition prohibitively expensive.
On April 25, however, Twitter had reconsidered the offer, concluding that selling the company to Musk for $ 54.20 per share was in the best interest of shareholders. In a joint press release, Musk pledged to “unlock” the social media company’s potential by loosening speech restrictions and eliminating fake accounts.
But his confidence did not last long. Shares of Tesla, Musk’s main source of wealth, plummeted amid a broader sell-off in May, and Musk soon seemed less excited to own Twitter.
Elon Musk appears as Wario in a Saturday Night Live sketch. (NBC)
Twitter’s lawsuit says Musk’s tactics are “a model of hypocrisy,” and noted that he had emphasized his plans to leave Twitter private to remove him from spam accounts. However, once the market slowed, Twitter noted that “Musk changed his narrative, suddenly demanding‘ verification ’that spam was not a serious issue on the Twitter platform and stated a burning need for carry out ‘diligence’ which he had expressly waived ”.
Similarly, the company accuses Musk of operating in bad faith, accusing him of soliciting information from the company to accuse Twitter of providing “distortions” about its business to regulators and investors.
Elon Musk, seen here dressed as a cowboy on Saturday Night Live. (NBC)
Musk “has been acting against this agreement since the market began to spin, and has repeatedly breached the merger agreement during the process,” the lawsuit alleges. “He sought to put the agreement on hold pending the fulfillment of imaginary conditions, breached his agreement. The obligations of funding efforts in the process, violated his obligations to deal with applications reasonable consent and to provide information on the status of funding, violated its obligation not to underestimate, misused confidential information and otherwise did not make the necessary efforts to consummate the acquisition.
Twitter’s lawsuit alleges that the company “has suffered and will continue to suffer irreparable harm” as a result of Musk’s breaches of contract that “affect Twitter and its business.”
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