Twitter has sued electric vehicles pioneer Elon Musk over his change of mind about buying the social media platform for $44 billion.
The suit is likely to be one of the most closely followed business battles of all time, pitching the colourful executive against the western commentariat’s favourite arena.
A court in Delaware, the US state which has emerged as the country’s leading business litigation venue, will be asked to order the world’s richest person to complete the merger at the agreed $54.20 per Twitter share.
“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,” the complaint said.
Fake Accounts On Twitter
On Friday, Musk said he was terminating the deal because Twitter violated the agreement by failing to respond to requests for information regarding fake or spam accounts on the platform, which is fundamental to its business performance.
The lawsuit accused the electric cars company boss of “a long list” of violations of the merger agreement that “have cast a pall over Twitter and its business.”
It said for the first time that employee attrition has been “on the upswing” since the deal was announced.
Twitter also accused Musk of “secretly” accumulating shares in the company between January and March without properly disclosing his substantial purchases to regulators, and “instead kept amassing Twitter stock with the market none the wiser.”
Shares of the social media platform closed at $34.06 on Tuesday, up 4.3%, but sharply below the levels above $50 where it traded when the deal was accepted by Twitter’s board in late April.
The stock added another 1% after the bell. Shares in Tesla, the maker of electric cars run by Musk, fell 0.5% on Tuesday.
- Reuters, with additional editing by George Russell