Elon Musk being Elon Musk walked out of $44 billion Twitter deal. So they sued him
Musk struck a deal to buy Twitter for USD 44 billion on 26th April.
Elon Musk's love-hate relationship with Twitter seems to have come to an end. But this breakup might cost him a lot of money.
Musk, the chief executive officer of Tesla, terminated the deal on Friday (June 8), saying that Twitter had failed to provide information about fake accounts on the platform.
Twitter has hired US law firm Wachtell, Lipton, Rosen & Katz LLP as it is getting ready to sue Musk and force him to complete the USD 44 billion acquisition of the social media company, reported Reuters.
Twitter's chairman said its board will take legal action after Elon Musk said he was pulling his $44 billion deal to buy the company https://t.co/sYHYV4Erbg pic.twitter.com/UWX5lHvCLk
— Reuters (@Reuters) July 10, 2022
On Friday, shares of Twitter fell 5% to $36.81, well below the $54.20 that Musk agreed to pay. Shares of Tesla, meanwhile, climbed 2.5% to $752.29, reported AP.
THE TWITTER DEAL
Musk struck a deal to buy Twitter for USD 44 billion on April 26th. Musk had bought a nine per cent stake in Twitter earlier in April, and then offered to buy the whole company outright.
Musk had agreed to pay USD 54.20 for every share of Twitter. 'Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,' he said in a statement.
THE SPAM BOT ISSUE
Musk has said that the real number of spam bots on Twitter may be four times higher than the company's estimates. Bots are fake accounts not controlled by a person, and can be used on social media to spread misinformation.
Twitter chief executive Parag Agrawal has said that fewer than five per cent of accounts active on any given day at Twitter are bots.
WHAT'S NEXT?
Twitter Inc has a strong legal case against Musk walking away from his deal but the social media could opt for a renegotiation or settlement instead of a long court fight, Reuters reported quoting legal experts.
Target companies often choose the certainty of a renegotiated deal at a lower price or financial compensation rather than a messy court battle that can last for many months, three corporate law professors interviewed by Reuters said.
— Elon Musk (@elonmusk) July 11, 2022
But...going by Musk's tweets it seems like he is ready to fight the legal battle.
— Elon Musk (@elonmusk) July 11, 2022