Elon Musk is being sued by Twitter in an effort to enforce the terms of his $44 billion purchase agreement of the business. After Musk indicated last week that he wanted to cancel the transaction, it’s the latest development in the months-long takeover controversy. Musk alleged that Twitter broke their agreement by refusing to give him the details he needed to confirm the amount of spam accounts on its network and by neglecting to carry out layoffs in the normal course of business.
According to his attorney, they were also debating how the agreement may be impacted by Twitter’s stock performance decreasing during a general market downturn. Bret Taylor, the chairman of Twitter’s board, announced that the firm intended to sue Elon Musk, the CEO of Tesla and SpaceX, after the letter from his attorney was made public. By filing a complaint in the Delaware Court of Chancery on Tuesday, the business kept its word.
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Musk tweeted, “Oh the irony lol,” shortly after the lawsuit was submitted. The following are some of the most serious charges Twitter levelled against Musk in its complaint: Musk’s own statements have aided in the decline of the stock price. The complaint asserts that Musk’s public criticisms of Twitter and the purchase have put the company’s operations at risk and “downward pressure on its share price.”
Twitter claims that Musk portrays the business and the potential merger as a “elaborate joke,” and the firm cites tweets from Musk mocking the ups and downs of the merger process. It asserts that Musk has kept criticizing the company, notably by publicly urging the SEC to look into its spam disclosures. Musk apparently missed a few meetings with Twitter to discuss spam. Twitter claims that Musk was given the opportunity to meet with Twitter executives to talk about spam accounts, but he declined.
The CEO of Twitter, Parag Agrawal, and CFO Ned Segal allegedly tried to schedule a meeting with Elon Musk and his staff to discuss the pervasiveness of spam on the platform. Segal apparently suggested a time to talk in the middle of June, but Musk claimed he had a conflict. Musk subsequently agreed to a meeting on June 21 but “then bowed out and instructed Agrawal and Segal to speak with his staff not about the spam estimation method but “the pro forma financials for the debt,” the complaint claims.”
Twitter claims that Segal volunteered again to meet with Musk later in June to discuss how Twitter samples accounts to gauge the amount of spam, but “That meeting never occurred despite several attempts by Twitter.” Musk’s exit plan “is a model of hypocrisy” and “bad faith,” according to critics. According to the company’s complaint, Musk initially claimed that making Twitter private would enable spam to be removed in a way that would otherwise be impracticable. Images of Musk’s tweets from April, when he declared, “If our twitter bid succeeds, we will defeat the spam bots or die trying,” are included in the document to demonstrate his awareness of Twitter spam accounts.
Twitter asserts that Musk didn’t start demanding evidence that spam was not a significant problem on the site until the market started to fall. According to Twitter, Musk is also behaving in bad faith by reportedly saying falsely that the deal’s completion “depends on the outcomes of his fishing trip and his ability to acquire loan financing.”
According to reports, Musk accepted ‘seller-friendly’ terms.
According to Twitter, Musk voluntarily proposed and consented to parameters that were “as he touted,’seller friendly’.” The corporation stated in the complaint that “there is no financing contingency and no diligence condition.” “Airtight debt and equity pledges support the acquisition. $33.5 billion has been committed by Musk directly. According to Musk’s attorney, Twitter’s recent layoffs may have violated the contract because they deviated from the usual course of business.
Twitter argues that without Musk’s input, it had acquired a right to hire and fire staff as it saw suitable. Musk apparently wanted to stop Twitter from recruiting or terminating vice presidents or above, but the firm said it was successful in doing so before the contract was signed. According to Twitter, the contract’s closure conditions were not many. A 75% vote of Twitter’s stockholders, regulatory approvals, and the absence of any meaningful adverse impacts at the time of completion were all requirements for the transaction.