Yahoo Finance Elon Musk: Twitter says billionaire’s attempt to destroy deal is ‘invalid and wrongful’
Elon Musk’s attempt to pull out of his bid to buy Twitter is “invalid and wrongful” according to the social media company’s lawyers.
Twitter said that it has “breached none of its obligations under the Agreement” and that, “as it has done, Twitter will continue to provide information reasonably requested by Mr. Musk under the Agreement and to diligently take all measures required to close the transaction” in a letter sent by the company’s law firm.
The letter comes after Mr Musk’s lawyers accused Twitter of having misled him about the nature of the company and the purchase.
They claimed that Twitter “made false and misleading representations upon which Mr Musk relied when entering into the Merger Agreement” in a filing with the US Securities and Exchange Commission.
The alleged reason that Mr Musk is pulling out of the deal is because he claims Twitter executives have hidden the full extent of bots and automated accounts on the platform.
Twitter has said that they account for less than five per cent of its active users – a number that Mr Musk said he would not believe until he had been able to check himself. When chief executive Parag Agrawal detailed how Twitter estimates fake accounts in a lengthy thread, Mr Musk responded with the poop emoji.
Twitter later gave Mr Musk access to a ‘firehose’ of real time data, including API information, so he could check the findings. The company is keen to have the deal go through, especially since Twitter’s stock has dropped significantly due to the multibillionaire’s comments about the deal.
“The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr Musk and plans to pursue legal action to enforce the merger agreement,” tweeted Bret Taylor, Twitter’s chairman. “We are confident we will prevail in the Delaware Court of Chancery.”
The conflict between Twitter and Mr Musk has had severe impacts on both parties.
Mr Musk has reportedly lost approximately $49 billion since launching his bid to buy Twitter in April due to declining Tesla stock.
Twitter, meanwhile, fired 30 per cent of its recruitment team in a move that shocked employees – with The Independent understanding that Twitter revoked the employees’ access to online resources while in their redundancy meeting.
In a prior meeting with Twitter employees, Mr Musk alluded to job cuts saying that the company’s “costs exceed the revenue”, and employees feel such changes have been made to appease their potential new owner.
However, despite Mr Musk’s reputation for playing fast and loose with his company decisions, Twitter could be a stronger contender should this go to court.
“Twitter can robustly face up to Musk’s claim that he doesn’t have enough data to accurately count Twitter’s spam accounts. From a legal standpoint, Twitter was justified in initially limiting the data it provided to Musk – there are several restrictions imposed by various regulations and significant liabilities related to oversharing”, Ali Mogharabi, a senior equity analyst for Morningstar, told The Independent.
“Twitter can use current market conditions to explain the resignation of Twitter employees. The operational decisions and reduction in headcount cannot with certainty be attributed to a change in how Twitter has operated since Musk’s offer was accepted.”
