Twitter Suing Musk Claiming Attempt to Purchase Company Was ‘Elaborate Joke’
WASHINGTON — Twitter sued Elon Musk Tuesday after the world’s richest man attempted to back out of his $44 billion deal to buy the social media company last week.
The company calls his attempt to back out part of a “long list of material contractual breaches by Musk that have cast a pall over Twitter and its business,” according to the lawsuit.
The lawsuit filed in the Delaware Court of Chancery could force him to buy the company at the same stock price — $54.20 per share — or pay the $1 billion breakup fee, which is part of the purchase agreement.
This comes after a months-long battle where Musk secretly bought 9.2% of the company’s stock, attempted a hostile takeover of the company, and then came to an agreement to buy it all in the month of April.
Musk stated one of his top priorities in buying the company was to rid the social media platform of automated spam “bot” accounts. In his filing to terminate the deal, his lawyers wrote Twitter was not forthcoming with information about the number of bot accounts.
Twitter refuted his claims. In the company’s lawsuit, it also said it gave him that information “to the best of its knowledge.”
The lawsuit also points out, “Musk made his offer without seeking any representation from Twitter regarding its estimates of spam or false accounts.”
The company contends Musk’s complaint about the spam accounts and his entire plan to purchase the company is part of an “elaborate joke,” the company wrote in its lawsuit which included copies of Musk’s memes about the Twitter deal.
“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,” the company wrote.
Shortly after the lawsuit was filed, Musk tweeted, “Oh the irony lol.”
In the lawsuit, Twitter lays out how the timeline of Musk requesting information on bots coincides with the market downturn that caused him to lose about $100 billion from his Tesla stock since last November.
“So Musk wants out. Rather than bear the cost of the market downturn, as the merger agreement requires, Musk wants to shift it to Twitter’s stockholders,” according to the lawsuit.
The company contends this is part of Musk’s tactics that have been filled with disdain for the company and its shareholders since he first skipped out on filing the proper financial disclosures when he acquired 5% of the company.
Instead, Musk filed the proper paperwork on April 4, more than a week after he amassed 5% of the company’s stock on March 24. During that week between, he continued buying stock in the company accumulating 9.2% of the company’s stock.
“It tracks the disdain he has shown for the company that one would have expected Musk, as its would-be steward, to protect,” the company stated in the lawsuit.
Along with the lawsuit, the company filed a motion asking to expedite the case during a four-day trial in September.
“Expedition is essential to permit Twitter to secure the benefit of its bargain, to address Musk’s continuing breaches, and to protect Twitter and its stockholders from the continuing market risk and operational harm resulting from Musk’s attempt to bully his way out of an airtight merger agreement,” the motion states.
Madeline can be reached at [email protected] or on Twitter @ByMaddieHughes