Musk announced on Friday that he was withdrawing from the agreement to buy Twitter for around $44 billion. To justify this, he referred to his previously unsubstantiated claims that there were significantly more fake accounts on Twitter than the company’s estimate of less than five percent. His lawyers argued, among other things, that Twitter failed to fulfill its contractual obligation to provide Musk with the necessary data access to verify the numbers. Twitter rejected this, calling Musk’s withdrawal “invalid and unlawful.”
A day later, Twitter’s lawyers added in the lawsuit: Musk probably believes that he can simply withdraw from a contract that has been concluded, denigrate the company, mess up its business and destroy shareholder values. “Musk’s behavior confirms that he intends to get out of the binding contract he has signed and damage Twitter in the process,” the document reads.
Twitter attributes Musk’s actions to the stock market downturn, which has shrunk both Twitter’s value and Musk’s fortune. However, the purchase agreement states that such a development is a risk to be borne by Musk and is not a reason for an exit. In the lawsuit, Twitter describes its challenge to estimates of the number of fake accounts and demands for more data as an attempt to create a pretext for terminating the deal. Musk admitted that he had not read a detailed explanation from Twitter regarding the estimation method. Musk’s wordless tweet with a poop emoji in response to public statements by Twitter boss Parag Agrawal also made it into the lawsuit.
The company asked for an expedited review of the case. US experts see Twitter in a better legal position than Musk, but at the same time raise the question of whether it would ultimately be possible to force him to take over if he didn’t want it.
Musk had planned to buy Twitter himself in the spring. He repeatedly emphasized that he was not concerned with money, but above all with strengthening freedom of speech on the platform. Musk said he would let former US President Donald Trump, who was banned from Twitter, back on the platform.
The board of directors of the online service initially blocked Musk’s bid of $54.20 per share, but then accepted it. Next, in the coming months, shareholders should vote to sell their stake to Musk. Musk’s price would be a good deal for many of them: the stock closed at a good $34 on Tuesday following gaining more than four percent.
