Yahoo Finance Elon Musk must ‘honour his obligations’ to buy Twitter and has shown ‘disdain’ for deal, company says
Twitter has filed a lawsuit against Elon Musk in an attempt to force him to purchase the social media company.
The richest man in the world must “honour his obligations” to complete the deal.
Twitter brings this action to enjoin Musk from further breaches, to compel Musk to fulfill his legal obligations, and to compel consummation of the merger upon satisfaction of the few outstanding conditions,” Twitter writes in the lawsuit, which was filed in the Delaware Court of Chancery as Twitter’s chairman Bret Taylor said would happen earlier this week.
Shortly after Twitter filed the suit, Mr Musk responded with a tweet: “Oh the irony lol.”
Oh the irony lol
— Elon Musk (@elonmusk) July 12, 2022
In the filing, Twitter states that “rather than bear the cost of the market downturn”, Mr Musk wants to “shift it to Twitter’s stockholders”. Twitter also states the multibillionaire has “disdain … for the company that one would have expected Musk, as its would-be steward, to protect” and has “repeatedly disparaged Twitter and the deal, creating business risk for Twitter and downward pressure on its share price.”
The company makes other damning comments: that Mr Musk’s strategy is a “model of bad faith”, and made “all-too-obvious public references to a hostile tender offer”, with the lawsuit screenshotting Mr Musk’s tweets from April.
It also includes Mr Musk’s poop emoji that he sent to chief executive Parag Agrawal during their dispute about bot numbers. In May, Mr Musk announced that his proposed takeover of the social media platform was “on hold” as he looked for more information about spam, bots and fake accounts on the platform. Since then, Twitter provided Mr Musk with even more data.
On Tuesday evening, Mr Agrawal sent an internal memo to all employees. “We took this opportunity to tell our story and defend our company, our people, and our stockholders,” he wrote in the memo, obtained by The New York Times.
The lawsuit also pushes back against one of Mr Musk’s reasons for pulling out of his purchase: that “Twitter’s conduct in firing two key, high-ranking employees ... implicates the ordinary course provision” according to Mr Musk’s lawyers.
Twitter recently fired 30 per cent of its recruitment team in a move that shocked employees, and had removed Kayvon Beykpour and Bruce Falck, the company’s former head of Consumer Product and head of Revenue, respectively, in May.
Twitter claims that it “negotiated for itself a right to hire and fire employees at all levels, including executives, without having to seek Musk’s consent. Musk’s initial draft of the merger agreement would have deemed the hiring and firing of an employee at the level of vice president or above a presumptive violation of the ordinary course covenant absent Musk’s consent. Twitter successfully struck that provision before signing.”
The deal between Mr Musk and Twitter had a “drop-dead” deadline of 24 October, so Twitter wants the case to be heard before then. The company is pushing for the trial to take place over four days in September this year.
