Twitter has sued Elon Musk for backing out out of the $44 billion bid to buy the platform. The Tesla Boss last week announced his intention to terminate the acquisition deal after Twitter breached the terms of the agreement.
Musk alleged that the company had withheld data regarding the true number of bots and fake accounts on the platform.
In the suit, Twitter terms Musk’s intended termination as invalid and wrongful. The social media platform says that it is Musk, who is in fact, in breach of the agreement and are seeking to prevent him from further breaches and to “compel consummation of the merger upon satisfaction of the few outstanding conditions.”
“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,” said the complaint.
Twitter also alleges that Musk secretly purchased shares of the business between January and March without properly informing regulators of his significant purchases, and that he “continued accumulating Twitter stock with the market none the wiser.” The company said that no financial penalty could repair the damages caused by Musk, except for him to go through with the deal.
“Musk’s conduct simply confirms that he wants to escape the binding contract he freely signed, and to damage Twitter in the process,” the lawsuit contended.
“Twitter has suffered and will continue to suffer irreparable harm as a result of defendants’ breaches.”
Musk criticized the firm on Twitter over the weekend after it stated it would litigate to enforce the arrangement in his first public comments since the announcement.
“They said I couldn’t buy Twitter. Then they wouldn’t disclose bot info. Now they want to force me to buy Twitter in court. Now they have to disclose bot info in court,” he wrote in a tweet.
The agreement is now probably headed for a protracted legal battle to see if Twitter can compel Musk to complete the transaction and acquire the company, or at the very least, pay the $1 billion breakup fee stipulated in the original agreement.
Twitter referred to Musk’s comments as a “pretext” that lacked substance and claimed his choice to go had more to do with the stock market’s collapse, particularly for tech equities.
Since the announcement of the deal, the value of Tesla’s stock, which is the main source of Musk’s wealth, has decreased by over 30%. On Tuesday, the stock ended at $699.21.
Twitter also claimed that it first withheld additional spam account information from Musk out of concern that he might quit the deal and launch a rival platform. The platform announced a few weeks ago that it was granting the billionaire full access to its data.
“Twitter has bent over backwards to provide Musk the information he has requested, including, most notably, the full ‘firehose’ data set that he has been mining for weeks,” the lawsuit said.
“From the outset, defendants’ information requests were designed to try to tank the deal.”
Musk announced plans to buy Twitter in February this year, but has taunted the company with disparaging tweets since. Experts believe Twitter has an upper hand in the lawsuit which has attached several of the billionaire’s tweets.
“For Musk, it would seem, Twitter, the interests of its stockholders, the transaction Musk agreed to, and the court process to enforce it all constitute an elaborate joke,” the lawsuit said.