SAN FRANCISCO 鈥� Twitter sued Tesla CEO Elon Musk on Tuesday to force him to complete the $44 billion acquisition of the social media company.
Musk and Twitter have been since the billionaire said Friday he was backing off of his April agreement to buy the company.
Twitter鈥檚 lawsuit opens with a sharply-worded accusation: 鈥淢usk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.鈥�
鈥淗aving mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he 鈥� unlike every other party subject to Delaware contract law 鈥� is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away,鈥� the suit says.
Twitter filed its lawsuit in the Delaware Court of Chancery, which frequently handles business disputes among the many corporations, including Twitter, that are incorporated there.
Musk alleged Friday that Twitter has failed to provide enough information about the number of fake accounts on its service. Twitter said last month that it was making available to Musk a 鈥砯ire hose鈥� of raw data on hundreds of millions of daily tweets.
The company has said for years in regulatory filings that it believes about 5% of the accounts on the platform are fake. Musk is also alleging that Twitter broke the acquisition agreement when it fired two top managers and laid off a third of its talent-acquisition team.
When Musk offered to buy the company and take it private in mid-April, the board initially tried to block him by deploying a financial maneuver that would have made the acquisition prohibitively expensive.
By April 25, though, Twitter had reconsidered the offer, concluding that selling the company to Musk for $54.20 a share was in the best interest of shareholders. In a joint press release, Musk pledged to 鈥渦nlock鈥� the social media company鈥檚 potential by loosening restrictions on speech and rooting out fake accounts.
But his confidence didn鈥檛 last long. Tesla鈥檚 stock 鈥� Musk鈥檚 primary source of wealth 鈥� plummeted amid a broader stock market selloff in May, and Musk soon seemed less enthusiastic about owning Twitter.
Twitter's suit calls Musk's tactics 鈥渁 model of hypocrisy,鈥� noting that he had emphasized plans to take Twitter private in order to rid it of spam accounts. Once the market declined, however, Twitter noted that "Musk shifted his narrative, suddenly demanding 鈥榲erification鈥� that spam was not a serious problem on Twitter鈥檚 platform, and claiming a burning need to conduct 鈥榙iligence鈥� he had expressly forsworn.鈥�
Similarly, the company charges that Musk operated in bad faith, accusing him of requesting company information in order to accuse Twitter of providing 鈥渕isrepresentations鈥� about its business to regulators and investors.
Musk 鈥渉as been acting against this deal since the market started turning, and has breached the merger agreement repeatedly in the process," the suit charges. "He has purported to put the deal on 鈥榟old鈥� pending satisfaction of imaginary conditions, breached his financing efforts obligations in the process, violated his obligations to treat requests for consent reasonably and to provide information about financing status, violated his non-disparagement obligation, misused confidential information, and otherwise failed to employ required efforts to consummate the acquisition.鈥�
Twitter鈥檚 lawsuit alleges that the company 鈥渉as suffered and will continue to suffer irreparable harm鈥� as a result of Musk鈥檚 contractual breaches that 鈥渃ast a pall over Twitter and its business.鈥�
Matt O'brien, The Associated Press
