Twitter is suing Elon Musk to sign him to a $44 billion contract

WILMINGTON, Delaware, July 12 (Reuters) – Twitter Inc (TWTR.N) sued Elon Musk on Tuesday for breaching its $44 billion deal to buy the social media platform and asked a Delaware court to stop it. order the richest person in the world to finalize the merger. at the agreed price of $54.20 per Twitter share.

“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 complaint reads.

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.

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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 platform, which is fundamental to its commercial performance. Read more

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.” He said for the first time that employee attrition had been “up” since the deal was announced.

Twitter also accused Musk of “secretly” hoarding shares of the company between January and March without properly disclosing his substantial purchases to regulators, and “instead, he continued to hoard Twitter shares without the market s ‘realize it’.

Shares of the social media platform closed at $34.06 on Tuesday, up 4.3% but well below the levels above $50 where it was trading when the deal was agreed to by Twitter’s board of directors at the end of April. The stock added another 1% after the bell.

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 failure to conduct business in the ordinary course of business – although Twitter said it removed that language from the merger agreement during negotiations.

Twitter also said it is not sharing more information with Musk regarding spam accounts because it fears it could create a competing platform after dropping the acquisition.

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 about 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. Read more

“In its complaint, Twitter takes a strong stance that Musk had a case of buyer’s remorse — and that’s the reason, not the bots, for his decision to pull out of the deal,” Brian said. Quinn, professor at Boston College Law. School. “The facts that Twitter presents here make an extremely strong argument in favor of Twitter entering into this agreement.”

Musk is among Twitter’s most followed accounts and the lawsuit included images of several of his tweets, including a poo emoji, which the company said violated the merger’s “non-disparagement” clause.

Musk tweeted the emoji on May 16 in response to a pair of tweets from Twitter CEO Parag Agrawal explaining the company’s efforts to crack down on spam accounts.

It also included an image of a text message Musk sent to Agrawal after Twitter on June 28 requested assurances of Musk’s funding for the deal.

“Your lawyers are using these conversations to cause trouble,” Musk texted Agrawal. “This must stop.”

Twitter noted that after Musk announced he was terminating the deal, he sent out tweets on Monday that Twitter said suggested his spam requests were part of a plan to force data from spam in the public sphere.

“To Musk, it would appear that Twitter, the interests of its shareholders, the transaction Musk agreed to, and the legal process to enforce it constitute an elaborate joke,” the lawsuit said.

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Reporting by Tom Hals in Wilmington, Delaware Editing by Chris Reese, Noeleen Walder and Matthew Lewis

Our standards: The Thomson Reuters Trust Principles.

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