Twitter sues Elon Musk for backing out of $44bn takeover deal

13 Jul 2022

Elon Musk. Image: Thomas Hawk (CC BY-NC 2.0)

In its complaint, Twitter said that the Tesla chief is refusing to keep his end of the deal because it ‘no longer serves his personal interests’.

Twitter is suing billionaire Elon Musk in a US court just days after he said he was terminating his deal to acquire the social media company for $44bn.

“In April 2022, Elon Musk entered into a binding merger agreement with Twitter, promising to use his best efforts to get the deal done,” the Twitter complaint in a court in Delaware reads.

“Now, less than three months later, Musk refuses to honour his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.”

The move is an escalation in a series of back and forths since Musk first announced his intention to buy Twitter in April. Last Friday (8 July), Musk said he plans to withdraw from the deal after claiming he didn’t receive enough information about fake accounts on the platform.

The Tesla boss initially said in May that he was putting the deal “temporarily on hold” until he could see calculations that confirm Twitter’s claim that spam and fake accounts represent less than 5pc of users on the site.

He is now claiming that Twitter ignored his requests for this information, rejected them for reasons that “appear to be unjustified” and gave “incomplete or unusable” information.

But Twitter has hit back with a lawsuit. The company said this followed “a long list of material contractual breaches by Musk that have cast a pall over Twitter and its business”.

“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,” Twitter wrote in its complaint.

The lawsuit claims that the rationale stated by Musk for backing out of the deal are “pretexts” to help him avoid bearing the cost of market downturns since the deal was first agreed.

“The value of Musk’s stake in Tesla, the anchor of his personal wealth, has declined by more than $100bn from its November 2021 peak. So Musk wants out.”

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Elon Musk. Image: Thomas Hawk via Flickr (CC BY-NC 2.0)

Vish Gain is a journalist with Silicon Republic