The wait is over. Twitter is officially suing Elon Musk, the world’s richest man, for trying to weasel his way out of his agreement to buy the company. The furious lawsuit accuses Musk of acting in bad faith and comes less than one week after Musk sent a letter to the social media company making clear his intention to terminate the $US44 ($61) billion acquisition deal he made in late April.
Twitter, in the 62-page-suit filed in Delaware court Tuesday, lashed out at Musk, alleging he “refuses to honour his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interest.” The company, which accused Musk of mounting a “public spectacle” around the deal, said it was suing Musk to compel him to fulfil his legal obligations and bring the enormous deal to a close.
“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,” the lawsuit reads. “This repudiation follows a long list of material contractual breaches by Musk that have cast a pall over Twitter and its business.”
Musk originally announced his intention to purchase Twitter for $US54.20 ($75) per share back in April, a deal that would have cost him around $US44 ($61) billion. Since then, Twitter’s stock, mirroring the larger tech industry, has tanked, and Musk has made what appear to be public attempts to scurry out of the deal or negotiate for a lower price. Tesla’s stock has also tanked, deflating Musk’s wealth. For months, Musk has tried to invoke Twitter’s longstanding issues with bot accounts as an avenue for potentially exiting the deal. In response, Twitter provided Musk with a flood of user data to try and address his bot concerns, and then gave him even more data, but that still wasn’t enough. With neither side willing to budge, the conflict now enters stage of potentially prolonged legal combat. Twitter did not immediately respond to Gizmodo’s request for comment.
“Musk wanted an escape.”
Twitter’s suit called bullshit on Musk’s so-called “exit strategy.” The company accused Musk of shifting the goal post around bots, first saying he acknowledged a desire to remove bots from the platform, should he become Twitter’s owner, before ultimately demanding “verification” that bots weren’t an issue. The suit went on to accuse Musk of trying to desperately grasp for ways out of the deal once market conditions had worsened.
“Musk wanted an escape,” the suit reads. “But the merger agreement left him little room. With no financing contingency or diligence condition, the agreement gave Musk no out absent a Company Material Adverse Effect or a material covenant breach by Twitter. Musk had to try to conjure one of those.”
Twitter’s suit doesn’t come as a surprise. The company revealed its intention to sue Musk almost immediately after he officially moved to terminate the deal last week. On Tuesday, Twitter CEO Parag Agrawal retweeted the company’s board chairman Bret Taylor who said Twitter would, “hold Elon Musk accountable to his contractual obligations.” Musk has not tweeted in response. He once replied to Agrawal with a poop emoji.