Elon Musk has filed a lawsuit against the company on Friday to force the acquisition of $ 44 billion in social media services, alleging that it tricked Twitter into obscuring the facts and not notifying the change of executives. He blamed him for his first formal response.
Mr. Musk’s lawyer, who signed a blockbuster deal to buy Twitter in April and then tried to end the purchase, aimed to oppose the company’s request for a four-day trial in September of the case. Discussed in the proceedings.
After “delays, technical bottlenecks, evasive answers, and finally a two-month treasure hunt for refusals,” Musk’s lawyer said Twitter was in a hurry to court. They added that Twitter is trying to “cover the truth” about the service’s fake accounts. This is the central issue of Mr. Musk’s desire to withdraw from his deal.
Twitter demanded a September trial as Mr. Musk was due to complete the deal to buy the company by October 24th. Mr. Musk’s lawyer proposed a February trial date instead, noting that the transaction deadline would be automatically extended in the case of a proceeding. .. The bank that promised to fund the transaction promised to raise it until April 25, 2023.
Mr. Musk’s legal filing was a strong condemnation of Twitter’s accusations that he was trying to unfairly end the acquisition. In this week’s proceedings, Twitter “intentionally and intentionally” agreed to acquire the company by falsely claiming that Mr. Musk did not have information about the spread of fake accounts on the service. , Deliberately and substantially violated. “
Read more about Elon Musk and Twitter
Subsequent court battles promise to be ugly and protracted. The traffic between the two had already escalated for several weeks before landing in court. Mr. Musk made prickly comments about the company and frequently asked about the spread of fake accounts on the platform. Fake accounts are used to spread spam and interact with Twitter services by accidentally pushing trends, and are often automated rather than run by real people.
At one point, Musk tweeted that a deal with Twitter was pending. His actions were in line with the decline in the value of tech stocks, including the stock of Tesla, an electric car maker led by Mr. Musk and a major source of his wealth.
Twitter claims to have worked with Musk to close the deal and aims to complete the sale. In the transaction agreement, Twitter and Musk have so-called specific performance clauses that allow the company to force the transaction through, as long as the debt that the millionaire has locked in for the acquisition exists. increase.
A Twitter spokesman declined to comment.
Ann Lipton, a professor of corporate governance at Tlane Law School, said it’s clear why Twitter is moving faster but Musk isn’t.
“Twitter’s board has every interest in resolving this quickly, and he has every interest in delays. Time is money,” she said. Regarding Mr. Musk, she added: Force some sort of reconciliation or retreat. “
In a legal submission, Mr. Musk’s lawyer reiterated much of the discussion they had this month when the millionaire said he was going to close the deal.
According to Filing, Twitter did not count fake accounts exactly, hindering Mr. Musk’s efforts to understand how spam was aggregated. “Mask was surprised to find out how poor the Twitter process was,” Filing said, saying the company used people instead of machine learning to understand the information.
Musk tried to get more data about fake accounts from Twitter, but added that the company “intentionally built an artificial obstacle and frustrated the defendant’s efforts.”
Mr. Musk required months of discovery and dozens of testimony records to determine how Twitter would count fake accounts, his lawyer said. Musk argues that Twitter’s public information that fake accounts account for about 5% of active users is misleading. Inaccurate numbers are a “significant negative effect” under trading terms and could allow Mr. Musk to leave, his lawyer said, and the numbers are “Twitter for users and advertisers. It has a direct impact on future value. “
Twitter Wrong user number Earlier, Mr. Musk’s lawyer said. In April, the company said it overestimated active users from 2019 to 2021.
In a lawsuit, the company informed Mr. Musk’s lawyer of the two executives, saying he “did not object.”
Twitter and Musk will hold a hearing on the case on Tuesday at Chancery Court, Delaware, where the company filed a proceeding against Billionaire. The court’s prime minister, Cataleen St. J. McCormick, has been appointed to oversee the case and decides whether to accelerate the case as requested by Twitter or postpone it for Mr. Musk.
If the proceeding is brought to justice, Judge McCormick decides whether Mr. Musk must close the transaction. She could also force Mr. Musk to leave while forcing damages. After reading her Twitter deal with Mr. Musk many times, her damages will be limited to $ 1 billion. Both sides may also resolve or renegotiate the transaction.
Twitter has lost about one-third of its value since Musk signed an agreement to buy the company for $ 54.20 a share. The company plans to report quarterly results next Friday.