Twitter sues Elon Musk forcing him to complete $44 billion acquisition – Billboard

Twitter sues Tesla CEO Elon Musk on Tuesday, tried to force him to complete his takeover of his $44 billion social media company by accusing him of “odd” actions and “bad faith” that cause irreparable harm and “destroy” the stock price of the platform.

Back in April, Musk pledged to pay $54.20 a share to Twitter, which the company agreed to on those terms after reversing initial opposition to the deal. However, the two sides have had to prepare for a legal battle since the billionaire said on Friday he was pulling out of the deal to buy the company.

Twitter’s lawsuit opens with a stark accusation: “Musk refuses to honor his obligations to Twitter and its shareholders because the agreement he signed is no longer in his personal interest.” his anymore”.

“After setting up a public spectacle to get Twitter into the game, and having proposed and subsequently signed a seller-friendly merger agreement, Musk clearly believes that he – unlike every other party subject to Delaware contract law – free to change your mind. company, disrupting its operations, destroying shareholder value and walking away,” the lawsuit states.

Twitter filed its lawsuit in the Delaware Chancery Court, which regularly handles business disputes between many corporations, including Twitter, incorporated there.

As part of an April settlement, Musk and Twitter agreed to pay each other a $1 billion breakup fee if either person is responsible for the deal’s failure. The company may have pressed Musk to pay the hefty fee but went further than that, trying to force him to complete the entire $44 billion purchase that was approved by the company’s board.

“Oh that’s ironic,” Musk tweeted after Twitter filed the lawsuit with no explanation.

Brian Quinn, professor of law at Boston College.

“They make a very strong argument that this is just buyer’s remorse,” Quinn said. “You have to eat your mistakes at Delaware Premier Court. That would work very favorably for Twitter. “

Musk alleged on Friday that Twitter did not provide enough information about the number of fake accounts on its service. Last month, Twitter said it provided Musk with a “fire hose” of raw data on hundreds of millions of daily tweets.

The company has said for years in legal filings that it believes about 5% of accounts on the platform are fake. Musk also alleges that Twitter broke an acquisition agreement by firing two top managers and laying off a third of its talent acquisition team.

Twitter’s lawsuit repeatedly underscores Musk’s intention to start out as a competitor on Twitter – an alternative where he is sometimes broadcast publicly and sometimes privately to executives. executive and board member of Twitter. Although the company said it cooperated with the data he requested about the fake “spam bot” accounts, the lawsuit shows that Twitter is concerned that too much disclosure of “highly sensitive information” is available. “could subject the company to competitive harm if shared.

The biggest surprise for Quinn was how much evidence Twitter had — such as communications with Musk about whether to keep or fire employees, as well as the billionaire’s own public tweets — to refute. dropped his arguments in favor.

“They are aligning many of Musk’s own tweets to get him into his own goals,” he said.

In a joint press release announcing the acquisition agreement, Musk pledged to “unlock” the social media company’s potential by easing restrictions on speech and eliminating fake accounts. Among his most attention-grabbing promises is for former President Donald Trump to return to the stage. Musk argued that Twitter’s ban on Trump following the January 6, 2021 uprising at the US Capitol is “morally bad” and “stupid to the extreme.”

But his confidence did not last long. Shares of Tesla – Musk’s main source of wealth – plummeted amid a widespread stock market sell-off in May, and Musk soon appeared less enthusiastic about owning Twitter.

Wedbush Securities analyst Daniel Ives said: “For Musk, the best-case scenario is for him to pay a $1 billion breakup fee but that’s highly unlikely. “The irony is that Twitter as trustee is clearly looking to enforce a deal Musk doesn’t want to make. It’s like buying a house you don’t want.”

Twitter’s lawsuit calls Musk’s tactics “a model of hypocrisy,” noting that he has highlighted his plan to make Twitter private to remove it from spam accounts. As the market tumbled, Twitter said, “Musk switched his story, suddenly asking to ‘verify’ that spam isn’t a serious issue on Twitter’s platform and claiming the burning demand was real.” showing ‘diligence’ that he has clearly given up”. “

Likewise, the company accused Musk of operating in bad faith, accusing him of requesting company information to accuse Twitter of providing “misinformation” about its business to regulators and Investors.

Musk “has been acting against this agreement since the market turned around and has violated the merger agreement on an ongoing basis in the process,” the lawsuit alleges. “He had intended to put the agreement on hold pending the satisfaction of imaginary conditions, in breach of his financial endeavours in the process, in breach of his handle requests for consent reasonably and provide information about his financial status, violate his obligation not to disparage, misuse confidential information and fail to make the necessary efforts to complete the acquisition. “

https://www.billboard.com/pro/twitter-sues-elon-musk-acquisition/ Twitter sues Elon Musk forcing him to complete $44 billion acquisition – Billboard

Fry Electronics Team

Fry Electronics.com is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@fry-electronics.com. The content will be deleted within 24 hours.

Related Articles

Back to top button