Twitter has filed a lawsuit in a Delaware state court against billionaire Elon Musk to force the Tesla founder and CEO to commit to his offer to buy the company after the parties’ deal broke down.
«Musk apparently believes that he, unlike any other party subject to Delaware contract law, is free to change his mind, tear the company apart, disrupt its operations, destroy shareholder value,» the company has said, as picked up by NBC News.
Twitter shares fell more than 7 percent on Monday after Musk confirmed his intention to terminate the contract to buy the social network. The company has accused the billionaire of causing its share price to plummet.
As it is, a long court battle is expected to determine whether Twitter can force Musk to close the deal and become its owner, or at least get him to pay the 1 billion dollars (987 million euros) established as a breakup fee in the original agreement, as reported by CNN.
It should be remembered that Musk and Twitter agreed on this penalty figure to be paid if the parties withdrew from the agreement, although if Twitter intends to force the purchase under the agreed terms, the situation could become complicated for the tycoon.
Last Friday, Musk told Twitter that he was resigning from the contract to buy the social network after receiving no response from the company when he asked for information on the number of fake accounts on the platform, as well as the company’s way of auditing and suspending them.
Musk had been publicly questioning Twitter’s ‘bot’ numbers for weeks, which many analysts saw as an attempt to drive down the tech giant’s share price. Twitter shares plunged more than six percent in post-announcement trading, CNN reported.
In mid-May, the tycoon decided to temporarily suspend the purchase of Twitter, agreed at the end of last April for about 44,000 million dollars (42,156 million euros), pending details to support the company’s estimate that fake/spam accounts represent less than five percent of users.
Subsequently, in a letter sent in early June by Musk’s lawyers to the U.S. Securities and Exchange Commission (SEC), the billionaire’s legal team considered Twitter’s position a «material breach» of its obligations under the merger agreement, warning that Elon Musk «reserves all resulting rights, including his right not to consummate the transaction and his right to terminate the merger agreement.»