Twitter sues Elon Musk, says he treated takeover deal like "an elaborate joke"

midian182

Posts: 8,033   +89
Staff member
What just happened? In what is the most unsurprising news of the year so far, Twitter has sued Elon Musk after he pulled out of a $44 billion bid to buy the platform. The company, which wants to force Musk to complete the deal, is using some of the Tesla boss' tweets as evidence that he saw the acquisition as little more than a joke.

The long-running saga of Musk's attempt to buy Twitter ended recently. The world's richest man once again blamed the decision on Twitter's alleged refusal to prove that the number of fake accounts on the platform constitutes less than 5% of its entire userbase. Musk claimed this represented a material breach of the deal, allowing him to walk away without paying the $1 billion termination fee.

Twitter's lawyers wrote in its Delaware-filed suit that Musk "refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interest," adding that the company was suing him to fulfill his legal obligations.

The filing doesn't hold back in its description of Musk's behavior: "For Musk, it would seem, Twitter, the interests of its stockholders, the transaction Musk agreed to, and the court process to enforce it all constitute an elaborate joke." Musk's recently posted memes, including one of Chuck Norris, were included in the filing.

"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—unlike every other party subject to Delaware contract law—is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away,"

Last month, Twitter made a "fire hose" of raw data consisting of every tweet posted every day available to Musk. He then said Twitter had placed an artificial cap on the number of searches his team could run on the data, but the reality was that it had hit the monthly limit of 100,000 queries, so Twitter increased the cap to 10 million.

Despite these actions, the suit claims Musk "exhibited little interest in understanding Twitter's process for estimating spam accounts," and that his "increasingly outlandish requests" were made so he could walk away from the deal. It's also claimed Twitter went to great lengths to meet these requests, despite Musk claiming the opposite.

It's possible that the suit could lead to a settlement or Musk and Twitter renegotiating the deal at a lower price than the original $54.20 per share agreement. Most experts believe the law is on Twitter's side.

Musk hasn't tweeted specifically about the lawsuit, though he did post a picture of Elden Ring's Malenia, Blade of Miquella, who's incredibly difficult to defeat.

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tkabou

Posts: 131   +157
The solution to Twitter’s woes was simple: if what you indeed disclose as truth about having <5% bots on the platform, offer the evidence. Simple.

No one, that has anything to hide, will hide the truth. In fact, had Twitter confirmed their own data by disclosing it, their stock would’ve gone even higher.

I’m not a legal expert, but it seems Musk has the upper hand here. No one should be buying a pig in a poke, especially one for $40B.
 

Bobbydpue

Posts: 361   +242
The solution to Twitter’s woes was simple: if what you indeed disclose as truth about having <5% bots on the platform, offer the evidence. Simple.

No one, that has anything to hide, will hide the truth. In fact, had Twitter confirmed their own data by disclosing it, their stock would’ve gone even higher.

I’m not a legal expert, but it seems Musk has the upper hand here. No one should be buying a pig in a poke, especially one for $40B.
There isn't enough evidence in this article to form an opinion, but I will say the following: was proving the number of fake accounts part of the deal? I don't think it was since that's not something that's easy to prove. Musk could just say "that's not good enough I don't believe these figures". Not being able to review the agreement or being an expert on reading them certainly makes it difficult to know which side is in the wrong and perhaps both sides are.
 

Bl00dyMinded

Posts: 485   +751
The more and more I read about this, the more I'm on Musk side on this one. Let the company give you every detail it has. The worst case he doesn't buy twitter, the best case if they do find a large number of bots is simple; he can offer them even less then the original deal and ends up buying it for cheaper since its worth less money with the details they provided on bot accounts.

Regardless, I'm enjoying seeing this platform fall the same way we saw Facebook with their Cambridge reports years ago.
 

Uncle Al

Posts: 8,936   +7,907
While Twitter has the upper hand it is doubtful the SEC will require purchase under the original price. Their past track record on these kinds of disputes is to re-assign the price at slightly above current market. Since Musk has several run-ins with the SEC he probably won't be given any special consideration BUT if his claims of a lack of cooperation against Twitter are found true, it is possible the SEC will rule against Twitter and nix the entire deal.
 

Ludak021

Posts: 709   +532
There isn't enough evidence in this article to form an opinion, but I will say the following: was proving the number of fake accounts part of the deal? I don't think it was since that's not something that's easy to prove. Musk could just say "that's not good enough I don't believe these figures". Not being able to review the agreement or being an expert on reading them certainly makes it difficult to know which side is in the wrong and perhaps both sides are.

Do you seriously think Musk didn't have a team of people looking over those papers? I'd also bet that those folk knew exactly what they are looking at.
 

Ohnooze

Posts: 235   +455
This sounds about right to me because just to become a billionaire, you have to have some kind of psychological defect.
What an odd view. Of all the crazy things we call "normal" these days and you call making more than a billion a "psychological defect"?
Making money is easy for some people. Some people are just good at seeing opportunities and prefer to drown themselves in work and success.
Claiming people with massive success have a "psychological defect" is just way off based.
What is with the demonization of success these days?
 

Alfatawi Mendel

Posts: 213   +316
Musk has an army of lawyers. They would've been over Twitter like a monkeypox rash BEFORE he made the buyout offer. The simple fact is that Musk cannot raise the capital for the buyout....and reneged on the offer, knowing it would bring the Twitter stock price down. Also knowing that the SEC isn't fit for purpose, and hasn't been for decades.
 

Watzupken

Posts: 644   +526
The fact is, there are no good parties here. While Twitter is hitting back on Musk, it is clear that there are significant issues with the company, thus, the reason for them dragging their feet on disclosure. Artificially inflating user numbers is likely to land them with legal hot soup as well.
 

fps4ever

Posts: 937   +1,366
Musk has an army of lawyers. They would've been over Twitter like a monkeypox rash BEFORE he made the buyout offer. The simple fact is that Musk cannot raise the capital for the buyout....and reneged on the offer, knowing it would bring the Twitter stock price down. Also knowing that the SEC isn't fit for purpose, and hasn't been for decades.

You literally do not know how these acquisitions work. They CAN"T look over anything without making an intent to buy offer first. THEN they are only given the information twitter deems necessary (legally cough) to give them.