Yet more of the Twitter and Elon Musk saga unfolds. The social media company is now taking legal action against the billionaire.
If you’ve been on the internet lately, then you probably know the outcome of Elon Musk and Twitter’s acquisition deal. Though Musk and the social media platform reached a monetary agreement in April, various controversies, stock plummets, and general unease made the Tesla CEO rescind his offer. Unfortunately for Musk, his contract disregard has left Twitter with no choice but to impose legal action against him.
Since Elon Musk has broken antitrust laws, Twitter has filed a lawsuit against him in a last-ditch effort for Musk to purchase the company. The $44 billion proposal Musk once offered is now being recalled, with many shareholders frustrated by his sudden backtracking. The lawsuit was filed in Delaware courts on Tuesday and accuses Musk of general hypocrisy as well as infringing upon his contract with Twitter. Musk knew that backing out of the deal could lead to a massive lawsuit but breached the contract anyways.
The lawsuit details Musk’s hypocritical motives in his attempt to abandon the deal. Most notably, the Tesla CEO tried using the claim that Twitter provided insufficient data about spam bots which left him uncomfortable about the purchase. Though Musk claimed that Twitter did not have the figures on how many fake accounts were active on the site, a spokesperson for the social media company stated that they had complied with all of Musk’s data needs. The lawsuit claims that Musk used pretexts like the insufficient data allegation to abandon the acquisition. Instead, Twitter believes Musk attempted to leave the deal due to a stock market devaluation of the social media platform after he signed the acquisition contract.
Many believe that Elon Musk’s disregard of his Twitter contract has more to do with the acquisition not aligning with his financial benefits. Because Twitter decreased its stock price after the public was aware of this potential partnership, Musk no longer wanted to purchase the company. Twitter’s lawyers agree with this statement, saying that Musk won’t buy the company because it “no longer serves his personal interests.” The Tesla CEO’s intentional breaching of the contract ensued in a lofty legal battle and will likely have Musk owning more than $1 billion in fees.
Since the lawsuit was filed in Delaware, the state law requires Musk to reply to the suit in 20 days. Twitter urged Musk to respond as quickly as possible, noting that not formally responding to the complaint rapidly would damage the company’s value. Once the court hearing begins, many suspect Musk will have difficulty trying to win over the judge and jury. Since Musk intentionally broke the contract, the case will decide if Musk’s infringement is legitimized by material adverse change or if the deal simply doesn’t fit his financial needs anymore.
Though Musk was confident in flipping Twitter to a social media site with fewer guidelines and restrictions, the entrepreneur has had a sudden change of heart. Musk abandoned the deal due to the massive number of fake accounts on the social media platform, though there’s no evidence to suggest it’s higher than recorded. Musk has used his personal Twitter account over the last month to make these allegations as well as attack the company’s shareholders and higher-ups.