Twitter’s board of directors has decided to sue Elon Musk over his failure to purchase the social network.
Summary
Elon Musk risks a lawsuit from Twitter
The news had been in the air for days, but now it has become official. Twitter has decided to take Elon Musk to court over his failure to purchase the social network for $44 billion, which fell through at the last moment due to the backtracking of the Tesla founder.
According to Twitter’s lawyers, Musk’s alleged justification for his withdrawal of the purchase offer is completely illegitimate and unfounded. As is well known, Musk had stated that in his opinion there was no understanding of how many fake social accounts, or rather bots masquerading as users, there were. And not having received clarification on the matter, he decided shortly thereafter to permanently withdraw his offer.
According to the lawyers, but also according to many neutral observers, this would only be an excuse, which Musk, realizing he had made a possibly risky move, clung to in order to blow up the deal. But Twitter seems intent on going through with it, and two days ago filed a 62-page-long lawsuit against Musk in a Delaware federal court to force him to comply with the deals he struck with the company’s board of directors.
In a note, Twitter said that Musk, having entered into a binding merger agreement, now:
“Refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests”.
“Elon Musk is a liar and a hypocrite and he should be forced to buy our company” looool
— Conor Sen (@conorsen) July 12, 2022
Twitter’s arguments in favor of the lawsuit
The lawsuit argues how Twitter provided all the data requested by Musk, having provided his lawyers with as much as 49 tebibytes of data in response to his requests for information. This is a truly enormous amount of data and from which all the information he needed could, according to Twitter, be extracted.
The text of the lawsuit filed by the lawyers reads:
“Having 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 — unlike every other party subject to Delaware contract law — is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away”.
According to Twitter’s attorneys, the requests for further investigation of the bots, allegedly came only after Tesla’s stock dropped substantially on the stock market, which evidently suggested that Musk should not embark on a money-losing venture.
The Twitter lawsuit states that:
“As the market (and Tesla’s stock price) declined, Musk’s advisors began to demand detailed information about Twitter’s methods of calculating mDAU and estimating the prevalence of false or spam accounts”.
In the wake of this news, Twitter’s stock gained more than 4%, after having lost about 15% since Musk decided to withdraw his takeover offer.
