Twitter sues Musk — Analysis
The company has accused the Tesla CEO of “hypocrisy” after he backtracked on his $44 billion buyout bid
According to Tuesday’s lawsuit, Twitter sued Elon Musk to get him to fulfill his promise to purchase Tesla for $44 Billion.
“Musk’s exit strategy is a model of hypocrisy,” the plaintiff argued, accusing the billionaire of negotiating in bad faith.
“Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he… is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away,” the document states.
Musk also stated that the social media platform had made a commitment “a long list of material contractual breaches… that have cast a pall over Twitter and its business.”
“Twitter takes this action in an attempt to stop Musk’s further violations and to force Musk to comply with his legal obligations,” the suit says. “Rather than bear the cost of the market downturn, as the merger agreement requires, Musk wants to shift it to Twitter’s stockholders.”
On Wednesday, in an apparent reference to the lawsuit, Musk tweeted: “Ah, the irony.”
Twitter stock prices plunged nearly 7% earlier after Musk’s decision to end the agreement. They traded below Musk’s $54.20-per share offer in April.
On Friday, the Tesla CEO canceled the $44 billion deal to buy Twitter, accusing the company of “Material breach of several provisions” regarding the issue of fake or bot accounts on the platform. Musk’s team did not agree with Twitter’s estimate of the number of these types of accounts, which put it at just 5% of users, saying the company made “Incorrect representations.”
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