TWITTER has sued billionaire Elon Musk on Tuesday in a bid to force him to complete the purchase of the social media firm.
The legal action in a Delaware court came days after the Tesla CEO announced that he was terminating his US$44 bil deal to buy the micro-blogging giant, reported Turkish news agency Anadolu Agency.
“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,” Twitter said in its lawsuit.
“Twitter brings this action to enjoin Musk from further breaches, to compel Musk to fulfil his legal obligations, and to compel consummation of the merger upon satisfaction of the few outstanding conditions.”
The company asked the court to order Musk to complete the merger at the agreed US$54.20 per Twitter share.
Musk backed out of the deal late last Friday for multiple reasons, including that Twitter allegedly undercounts the number of spam accounts on its service.
He alleged in his Friday termination letter that Twitter misrepresented user data, claiming the number of spam bots on the social media platform is much higher than the company has disclosed.
Twitter dismissed that claim, stating that the number of bots was well under 5% of its total daily active users.
The company also said it did not share more information with Musk regarding spam accounts because it feared he would build a competing platform after abandoning the acquisition.
Twitter called the reasons cited by Musk a “pretext” that lacked merit and said his decision to walk away had more to do with a decline in the stock market, particularly for tech stocks.
Tesla’s stock, the main source of Musk’s fortune, has lost around 30% of its value since the deal was announced and closed on Tuesday at US$699.21.
Legal experts have said that from the information that is public Twitter would appear to have the upper hand.
“In its complaint Twitter is taking a strong position that Musk had a case of buyer’s remorse – and that, and not bots, is the reason for his decision to walk away from the deal,” reckoned Brian Quinn, a professor at Boston College Law School.
“The facts Twitter presents here make an extremely strong argument in favour of Twitter getting this deal closed.” – July 13, 2022
