WILMINGTON, Del. — Twitter Inc sued Elon Musk on Tuesday for breaching the $44 billion deal to buy the social media platform and asked a Delaware court to order the world’s richest person to complete the merger at the agreed price of $54.20 per Twitter share, according to a court filing.
“Musk apparently believes that he – unlike all other parties subject to Delaware contract law – is free to change his mind, destroy the company, disrupt its operations, destroy shareholder value and s ‘go away,’ the lawsuit said.
The lawsuit sets in motion what promises to be one of the biggest legal showdowns in Wall Street history, involving one of the business world’s most colorful entrepreneurs in a case that will revolve around a language fixed contract.
On Friday, Musk said he was terminating the agreement because Twitter violated the agreement by not responding to requests for information about fake accounts or spam on the platforms, which is fundamental to its business performance. .
Musk, who is the CEO of electric vehicle maker Tesla Inc, did not immediately respond to a request for comment.
The lawsuit accused Musk of “a long list” of violations of the merger agreement that “cast a shadow over Twitter and its activities.”
The social media platform’s shares fell to $34.06 on Tuesday, well below the levels above $50 where it was trading when the deal was accepted by Twitter’s board in late April. .
Musk said he was ending the merger due to lack of spam account information and misrepresentation which he said constituted a “significant adverse event”. He also said the executive departures amounted to a breach of business conduct in the ordinary course of business, as Twitter was obligated to do.
Twitter said it negotiated to remove language from the merger agreement that would have made the terminations a violation of the normal course requirement.
Twitter called the reasons Musk gave an unsubstantiated “pretext” and said his decision to pull out had more to do with a decline in the stock market, particularly for tech stocks.
Tesla stock, the main source of Musk’s fortune, has lost 30% of its value since announcing and closing the deal on Tuesday at $699.21.
Legal experts said that, based on public information, Twitter appears to have the upper hand because of the way Musk brokered the deal, refusing to do traditional pre-merger due diligence.
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