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Twitter stakeholders, fed up with Elon Musk’s attempt back out of his agreement to buy the social media platform, filed a lawsuit in the hope of forcing the issue. The suit, filed on Tuesday in the Delaware Court of Chancery, asserts Musk’s bid to terminate his acquisition was “invalid and wrongful.”
The filing indicated the tech mogul’s conduct amounted to “bad faith.” Twitter stated Musk’s desire to terminate the contract stems from the market shares decline. Tesla’s CEO strategically forced the social media platform to agree with the purchase in April. At the time of the acquisition agreement, the company’s shares were $54.20. Those shares were trading at $34.06 at the market’s closing on Tuesday.
“Since signing the merger agreement, Musk repeatedly disparaged the [company] and the deal, creating business risk for Twitter and downward pressure on its share price,” alleged the suit
Last week, Musk said wanted to withdraw from the $44 billion agreement. In the filing with the Securities and Exchange Commission, he argued was dissatisfied with the social media’s refusal to turn over accurate information about spam and bot accounts on the site. Tesla’s CEO claimed Twitter had not fulfilled its obligation.
William Savitt, the social media’s attorney, said his client disagreed with Musk’s complaint, “Twitter has breached none of its obligations under the Agreement.” The platform intends to enforce Musk’s commitments under the agreement.
In response to Musk’s accusations, Twitter stated it had hosted several information sessions with Musk’s team about the company’s operating procedures and its process of calculating its user count, and how it determines if an account is spam or false.
Twitter is headquartered in San Francisco, California but filed suit in Georgia. The company is registered there “and where many civil suits involving businesses are ofter heard,” according to NBC News.
Written by Cathy Milne-Ware
Sources:
CBS News: Twitter sues to force Musk to complete his $44B acquisition of the platform; by Irina Ivanova
CNBC: Twitter sues Elon Musk to enforce original merger agreement; by Kif Leswing and Lauren Feiner
NBC: Twitter sues Elon Musk to force him to buy the company — while accusing him of ‘trashing’ it; by Rob Wile
Featured and Top Image Courtesy of Steve Jurvetson”s Flickr Page – Creative Commons License
Inset Image Courtesy of Gerd Altmann’s Pixabay Page – Creative Commons License