After having started to buy Twitter, Elon Musk has been the target of a complaint directly from the social network with the blue bird in the night of Tuesday to today Wednesday, accusing him of failing in his obligations and damaging Twitter’s reputation by his incessant attacks after having declared not to want to buy Twitter.
It is a real and – surely – long battle between the two. The American multi-billionaire had started the $44 billion buyout of Twitter in early 2022. However, on July 8, the boss of Tesla and SpaceX backed out and made known in a document sent to the U.S. stock exchange authorities that he refused to buy the social network Twitter, accusing the company of having provided “false and misleading” data on the number of false or dormant accounts.
Twitter, determined to nail this purchase, justified itself and repeated in recent weeks that the number of fake accounts on its platform was less than 5%. Information, which did not satisfy Elon Musk and his team, who believe that the network is lying and that this affects the viability of its business and the value of the company.
Twitter retaliates by filing a complaint against Musk
The Tesla and SpaceX boss then accused the platform of not fulfilling its contractual obligations by lying about its data, to which Twitter responded by filing a lawsuit in a US state court in Delaware.
“In April 2022, Elon Musk signed a binding merger agreement with Twitter, in which he promised to make every effort to make the acquisition happen. Now, less than three months later, Musk refuses to honor his obligations to Twitter and its shareholders because the contract he signed no longer serves his interests,” write the lawyers of the platform.
Confident, they go on to add: “After making a public spectacle of himself to get Twitter to consider his offer, and proposing and then signing a merger agreement favorable to the seller, Musk apparently believes that he has the right – unlike any other entity subject to Delaware law – to change his mind, demolish the company’s reputation, disrupt its operations, destroy shareholder value and walk away.”
Determined not to let it happen, Elon Musk justified his decision by arguing that “the hiring freeze contrary to the obligation for the company (Twitter, editor’s note) to continue to operate normally” and “a declining financial outlook” would have motivated him to refuse to buy the social network. He also reacted directly to this announcement of complaint on Twitter – where he has more than 100 million followers – with a tweet saying “Oh the irony lol” .
Oh the irony lol
— Elon Musk (@elonmusk) July 12, 2022
Twitter’s lawyers, who claim that Elon Musk’s claims “are a model of hypocrisy“, “bad faith” and show “pretexts without any merit,” regret Elon Musk’s behavior.
The fall of Twitter shares as another cause of the refusal to buy
Since the announcement of the buyout at the beginning of the year, the company’s shares fell by 11.3% on the New York Stock Exchange to end at $ 32.65. Musk’s decision would therefore have a lot to do with the fluctuations in its stock price. “Rather than bear the cost of this market reversal, as the merger agreement requires, Musk wants to pass it on to Twitter shareholders,” Twitter’s lawyers point out.
They also go on to state that Elon Musk has directly contributed to the decline in Twitter stock by publicly criticizing or mocking the company via interposed tweets, including with its CEO, Parag Agrawal.
“Since signing the merger agreement, Musk has repeatedly disparaged Twitter and the deal, creating business risk for Twitter and downward pressure on its stock” . However, Twitter shares, which had been in decline for four months, rebounded Tuesday and gained 4.32%.
If Twitter is convinced that “Musk’s behavior simply confirms that he wanted to get out of a contract he signed freely, and harm Twitter at the same time,” the social network does not intend to be mocked by Elon Musk, who since Monday has not ceased to taunt the latter on his own platform.
— Elon Musk (@elonmusk) July 11, 2022
If Elon Musk really intends to refuse any takeover of Twitter, the court said that the latter must prove that the number of bots is much higher than the 5% he claims but also that this gap affects the ability of Twitter to make profits in the long term. Many experts expect a buyout of the platform with a price renegotiated downwards, even if forcing the buyout seems unlikely. The arm wrestling will therefore have to be settled amicably.
The fate of Elon Musk, putting forward arguments that are not sufficient according to lawyers, does not seem to be sealed for all that definitively, even if he still suggests that he will have no choice but to negotiate a buyout with Twitter. To be continued.
Featured photo : © GettyImages
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