Twitter’s lawsuit intends to force Musk into completing his planned $44 billion acquisition of the social media platform.
Twitter has followed up on its threats to file a lawsuit against Tesla founder and C.E.O. Elon Musk, hoping that legal action could compel the billionaire businessman to follow through on his promise to acquire the social media platform.
According to CNBC, Twitter submitted its complaint to the Delaware Court of Chancery after Musk publicly stated that he no longer wished to acquire the company.
Musk claimed that Twitter violated the terms of the $44 billion agreement, failing to provide information about the number of spam and automated accounts on the platform.
Musk further alleged that Twitter failed to proceed with its ordinary course of business by conducting mass layoffs.
An attorney for the controversial Tesla executive also said that Musk is considering whether Twitter’s declining stock market performance may impact the acquisition agreement.
While Musk’s lawyers wrote a letter to Twitter detailing their concerns and intent to pull out from the agreement, Twitter’s board chairman, Bret Taylor, immediately responded by threatening to take both Musk and SpaceX to court.
Shortly after Twitter officially filed its complaint, Musk wrote on Twitter, “Oh, the irony lol.”
CNBC suggests that Musk’s own words appear to have contributed, at least in part, to Twitter’s waning stock prices.
In its lawsuit, Twitter alleges that Musk appears to view both the company and his planned acquisition as an “elaborate joke,” with Twitter attorneys pointing to Musk’s tweets making light of the complicated merger process.
Twitter says that Musk has continued to “disparage” the business, including Musk’s call for the federal S.E.C. to investigate the social media company’s so-called spam disclosures.
Twitter also said that its own executives offered to meet Musk to discuss his concerns, but that Musk never showed up.
Interestingly, and in spite of Musk citing a preponderance of spam accounts as the reason for his skepticism, Twitter’s lawsuit includes images of Musk’s tweets lambasting the prevalence of commercial bot accounts.
“If our Twitter bid succeeds, we will defeat the spam bots or die trying!” Musk wrote in an April tweet.
Twitter suggests that Musk only referenced spam accounts as a reason to halt the merger after the company’s stock market valuation fell.
“Rather than bear the cost of the market downturn, as the merger agreement requires, Musk wants to shift it to Twitter’s stockholders,” the company claims.
According to Twitter, Musk has acted in bad faith by falsely asserting that the deal “depends on the results of his fishing expedition and his ability to secure debt financing.”
Musk had, for instance, willingly agreed to terms that he admitted were “seller-friendly.”
“There is no financing contingency and no diligence condition,” Twitter wrote in the complaint. “The deal is backed by airtight debt and equity commitments. Musk has personally committed $33.5 billion.”
Twitter added that Musk’s current behavior is consistent with his past actions, such as acquiring massive amounts of Twitter stock without submitting the proper regulatory notice.
“It tracks the disdain he has shown for the company that one would have expected Musk, as its would-be steward, to protect,” Twitter wrote.