Twitter Officially Sues Elon Musk For Pulling Out of $44 Billion Buyout Deal
Twitter has undertaken legal actions against Elon Musk, who terminated the deal to purchase the social media giant hours ago.
Elon Musk Faces Twitter Lawsuit
Social media giant Twitter has filed a lawsuit against Tesla and SpaceX CEO Elon Musk, seeking to force the billionaire to close the acquisition deal as agreed by both parties.
According to court documents, the complaint filed in the Delaware Court of the Chancery on Tuesday (July 12, 2022) alleges that Elon Musk violated the terms of a merger agreement signed by both Twitter and the Tesla CEO.
The complaint stated that Musk “repeatedly disparaged Twitter and the deal” since signing the merger agreement.
The latest development comes shortly after Musk terminated the deal to purchase the social media company for $44 billion, after an initial suspension. Part of the reason for the termination was that Twitter refused to provide information relating to spam bots.
However, the recent lawsuit stated that Musk’s claims were a “pretext” and without merit.
“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.”
An excerpt from the court document reads
According to the lawsuit, “rather than bear the cost of the market downturn, as the merger agreement requires, Elon Musk wants to shift it to Twitter’s stakeholders.”
The social media giant further stated that since signing the merger agreement, Musk has repeatedly disparaged Twitter, creating business risks and putting pressure on the company’s stock price. As of July 12, Twitter shares are down 36% from the $54.2 Musk offered to buy the entire social network.
The case is expected to go to arbitration from September 19. According to documents filed with the US Securities and Exchange Commission (SEC) from April 26, Twitter and Musk will have to pay $ 1 billion if either party unilaterally terminates the contract. This compensation provision will be activated if Musk does not pay as promised, Twitter accepts an offer from another bidder, or shareholders vote to reject Musk’s offer. Twitter also may not solicit or negotiate with any other potential buyers after the deal, even if it is outbid.
Faced with this information, billionaire Elon Musk posted a status line that is said to be sarcastic on Twitter
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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Twitter Officially Sues Elon Musk For Pulling Out of $44 Billion Buyout Deal
Twitter has undertaken legal actions against Elon Musk, who terminated the deal to purchase the social media giant hours ago.
Elon Musk Faces Twitter Lawsuit
Social media giant Twitter has filed a lawsuit against Tesla and SpaceX CEO Elon Musk, seeking to force the billionaire to close the acquisition deal as agreed by both parties.
According to court documents, the complaint filed in the Delaware Court of the Chancery on Tuesday (July 12, 2022) alleges that Elon Musk violated the terms of a merger agreement signed by both Twitter and the Tesla CEO.
The complaint stated that Musk “repeatedly disparaged Twitter and the deal” since signing the merger agreement.
The latest development comes shortly after Musk terminated the deal to purchase the social media company for $44 billion, after an initial suspension. Part of the reason for the termination was that Twitter refused to provide information relating to spam bots.
However, the recent lawsuit stated that Musk’s claims were a “pretext” and without merit.
“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.”
An excerpt from the court document reads
According to the lawsuit, “rather than bear the cost of the market downturn, as the merger agreement requires, Elon Musk wants to shift it to Twitter’s stakeholders.”
The social media giant further stated that since signing the merger agreement, Musk has repeatedly disparaged Twitter, creating business risks and putting pressure on the company’s stock price. As of July 12, Twitter shares are down 36% from the $54.2 Musk offered to buy the entire social network.
The case is expected to go to arbitration from September 19. According to documents filed with the US Securities and Exchange Commission (SEC) from April 26, Twitter and Musk will have to pay $ 1 billion if either party unilaterally terminates the contract. This compensation provision will be activated if Musk does not pay as promised, Twitter accepts an offer from another bidder, or shareholders vote to reject Musk’s offer. Twitter also may not solicit or negotiate with any other potential buyers after the deal, even if it is outbid.
Faced with this information, billionaire Elon Musk posted a status line that is said to be sarcastic on Twitter
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
Follow CoinCu Youtube Channel | Follow CoinCu Facebook page
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