The Twitter board chair has hinted that the company may sue Elon Musk to enforce the agreement.
Twitter has reportedly hired top law firm Watchell, Lipton, Rosen & Katz LLP in preparation to sue Elon Musk as he backs off the acquisition deal. After offering to pay $44 billion to buy Twitter, Musk has withdrawn his offer. The Tesla CEO terminated the acquisition deal last week, stating that the social media company failed to provide accurate information on fake accounts on its platform.
Musk started asking questions after Twitter decided to sell the company to him. He was concerned about the percentage of spam or bot accounts on the platform. Musk and his team said they needed adequate information to evaluate Twitter’s prospects as a business. Twitter replied, saying 5% of its accounts are bots or spam. The billionaire claimed that Twitter gave inaccurate information about the number of fake Twitter users. Musk requested detailed information to further the deal, which Twitter never provided. Since then, there have been many suggestions that Musk may back out of the deal. Notably, the agreement between Twitter and Musk states that the billionaire will pay a $1 billion breakup fee if he decides not to continue with the purchase.
Noting the situation, Skadden Arps lawyer Mike Ringler wrote:
“Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified and, sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information.”
Twitter Hires Legal Team to Sue Elon Musk
The Twitter board chair, Bret Taylor, has hinted that the company may sue Elon Musk to enforce the agreement. People familiar with the matter revealed that Twitter is already planning to file suit early this week. As the company hired Wachtell, the company has access to lawyers like Leo Strine and Bill Savitt. Strine formerly served as Chancellor of the Delaware Chancery Court.
Elon Musk has reacted to the news that Twitter wants to sue him in court over the buyout. On his Twitter page, he posted memes of himself laughing. He explained that Twitter is forcing him to buy the social media company, but now, they have to declare the percentage of bot and spam accounts on its platform in court. Already, Musk has lost $65billion from his net worth since he announced his intention to buy Twitter.
At press time, Twitter (NYSE: TWTR) stock is at a premarket trading price of $34.33, dropping nearly 7% since its previous close of $36.81. Like many stocks in red, Twitter is also struggling amid inflation and market declines. In the last 12 months, the company has plunged over 47% and dropped almost 15% since the beginning of the year. Additionally, TWTR has lost more than 21.70% in the last three months. Twitter has also shed 0.59% over the past month and lost 3.71% in the last five days.