The battle between the world’s richest man and a social media giant continues.
Twitter has sued Elon Musk after the Tesla CEO officially attempted to exit the $44 billion USD (about $57.3 billion CAD) acquisition deal he announced in April.
“Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests,” the company writes in a suit filed to the Chancery Court in Delaware. “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.”
Musk, on the other hand, has claimed that Twitter has been “in material breach” of its own commitments. “For nearly two months, Mr. Musk has sought the data and information necessary to ‘make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform,’” reads a letter to the U.S.’ Securities and Exchange Commission (SEC) from Musk’s legal team. “Twitter has failed or refused to provide this information.”
Specifically, Musk has repeatedly said that he doesn’t believe Twitter’s public statements that roughly five percent of its active users are bots. He claims that he’s asked Twitter to provide accurate information, but the company hasn’t done so. Twitter has said it will work with Musk to deliver this data, but it’s unclear what’s actually transpired behind the scenes.
According to a Twitter memo obtained by The New York Times, the social media giant is seeking a four-day trial this September. This would, in theory, allow for a resolution prior to the acquisition deal’s October 24th deadline for completion. However, Musk and Twitter would have an additional six months to close the deal should it still be awaiting regulatory approval by that cutoff date.
It should be noted that in addition to the courts ruling in favour of either Twitter or Musk, both parties could reach some sort of settlement or even see the deal fall through. In the case of the latter scenario, Musk would pay a $1 billion USD (about $1.3 billion CAD) fee and walk away. There are several possible outcomes, ultimately.
Musk has not yet responded to Twitter’s lawsuit.
Source: Delaware Court of Chancery
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