Twitter sues Elon Musk for backing out of $44 billion deal

Twitter sued Elon Musk in Delaware on Tuesday for backing out of his $44 billion plan to buy the social media platform, accusing the world’s richest man of trying to “trash the company, disrupt its operations, destroy stockholder value, and walk away.” 

Twitter wants to force Musk to complete the merger at the original agreed price of $54.20 per Twitter share, according to the court filing.

“Having 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 — 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,” Twitter wrote in a 241-page complaint filed in the Delaware Court of Chancery.

“This repudiation follows a long list of material contractual breaches by Musk that have cast a pall over Twitter and its business,” the company added.

The suit comes after Musk said Friday he was terminating the takeover agreement because Twitter had failed to provide adequate information about fake accounts on the site. 

Twitter once again argued that it had given Musk adequate information about bots. It accused Musk of “using bad-faith pursuit of spam-related evidence to assert a baseless claim of breach [of contract].” 

The new filing included a screenshot of a poop emoji that Musk posted on Twitter in response to CEO Parag Agrawal’s statements about steps the company is taking to crack down on bots. Twitter argued the tweet is one of many examples of Musk “disparaging” Twitter in violation of the deal agreement. 

Twitter’s stock was up 1.0% at $34.39 in after-market trading. About an hour after Twitter filed its lawsuit, Musk took to his favorite platform and tweeted: “Oh the irony lol.”

“The Street views Twitter as having an iron-fist upper hand based on the merits going into the legal proceedings,” Wedbush Securities managing director Dan Ives told The Post. “Twitter is not holding back any punches nor should they.” 

But the company’s low stock price indicates that investors believe Musk having to pay a settlement or damages is more likely than a Delaware judge forcing him to buy Twitter, Ives said. He warned that the stock will be in for a wild ride as the legal wrangling potentially drags into 2023.  

In an internal memo Tuesday, Twitter’s general counsel told employees that the company had “filed a motion for an expedited trial alongside the complaint, asking for the case to be heard in September, as it is critically important for this matter to be resolved quickly,” according to the New York Times. 

In Friday’s SEC filing, Musk’s lawyers had claimed that “Twitter is in material breach of multiple provisions” of the buyout deal,” and that the company “appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement.”

The Tesla CEO’s legal team added that Twitter had unjustifiably ignored and rejected requests for data on how the company calculates what percentage of its users are bots. Twitter says the figure is lower than 5%, while Musk has claimed it could be far higher. 

Following Musk’s filing on Friday, Twitter Chairman Bret Taylor said the social media firm plans to “pursue legal action to enforce the merger agreement” and was “confident we will prevail in the Delaware Court of Chancery.”

In a rebuttal to Musk dated Sunday and filed with regulators on Monday, Twitter denied breaching any obligations of the merger contract. 

Twitter has hired corporate law heavyweight Wachtell, Lipton, Rosen & Katz to battle Musk, while Musk has retained Quinn Emanuel Urquhart & Sullivan, a white-shoe firm that has previously represented the Tesla CEO. 

Musk and Twitter first announced a $44 billion takeover agreement in April. The terms of the deal require Musk to pay a $1 billion break-up fee if he does not complete the transaction.