The billionaire said Friday that he was withdrawing from his April deal to buy the social media giant.
Twitter Inc. has sued Elon Musk for violating the $ 44 billion deal to buy the social media platform and asked a Delaware court to order the world’s richest person to complete the merger at $ 54.20 per agreed Twitter action, according to a court document.
“Apparently, Musk believes that he, unlike all other parties subject to Delaware contract law, is free to change his mind, dirty the company, disrupt its operations, destroy shareholder value, and leave.” , the lawsuit said Tuesday.
On Friday, Musk said he was ending the deal because Twitter violated the deal by failing to respond to requests for information about fake or spam accounts on the platforms, which is critical to its business performance.
Musk did not immediately respond to a request for comment.
The lawsuit accused Musk of “a long list” of violations of the merger agreement that “have affected Twitter and its business.”
Shares of the social media platform fell to $ 34.06 on Tuesday from more than $ 50 when the Twitter board accepted the deal in late April.
The company has said for years in regulatory documents that it believes about 5 percent of the platform’s accounts are fake. Musk has also alleged that Twitter broke the acquisition deal when it fired two senior executives and fired a third of its talent acquisition team.
Twitter said it negotiated to remove from the merger agreement the language that would have turned these layoffs into a violation of ordinary course requirements.
Twitter chairman Brett Taylor had previously stated that the company’s board was “committed to closing the deal on the price and terms agreed with Mr Musk and plans to take legal action to enforce the deal. fusion “.
The terms of the deal include a $ 1 billion breakout fee if Musk does not complete the transaction as agreed.
Daniel Ives, an analyst at investment firm Wedbush, previously stated in a note to clients that the legal battle could negatively affect Twitter, saying that “the company will fight Musk in an extended legal battle to regain the deal and / or or the rupture quota of at least $ 1 billion. “
Musk has taken to the platform, where he has more than 100 million followers, to criticize Twitter executives like CEO Parag Agrawal and question Twitter’s claims about the prevalence of spam accounts. In response to an Agrawal tweet talking about the steps Twitter has taken to crack down on fake accounts, Musk responded with a poop emoji.
These tweets have now become ammunition for Twitter, as it hopes to show that Musk has been careless and brazen with the agreement and the effect his words can have on the company he hoped to buy.
In the complaint against Musk, Twitter states, “It appears that, for Musk, Twitter, the interests of its shareholders, the transaction that Musk accepted and the legal process to enforce it, constitute an elaborate joke.”