Media & entertainment tech

Twitter Sues Elon Musk Over Failed Deal

Elon Musk

Twitter has sued Elon Musk after the Tesla CEO said he was backing out of the acquisition deal.

In the complaint, which was filed Tuesday, the social media company says “Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.”

Musk agreed to buy Twitter for $44 billion, or $54.20 per share, in April. But since then, he’s walked back on the deal.

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Musk has said he was backing out of the deal because Twitter didn’t disclose to him the number of spam accounts on the platform, and he didn’t believe the company’s public estimates of users that are bots. In his filing last week to terminate the deal, he said “Twitter has not complied with its contractual obligations,” in regard to the acquisition.

The stock spectacle

Twitter’s market capitalization has fallen significantly since the Musk spectacle began. At the close of market Tuesday, Twitter had a market cap of $26 billion—much less than what Musk agreed to pay for the company. The company also recently laid off nearly a third of its recruiting team.

“Rather than bear the cost of the market downturn, as the merger agreement requires, Musk wants to shift it to Twitter’s stockholders,” the complaint read. “This is in keeping with the tactics Musk has deployed against Twitter and its stockholders since earlier this year, when he started amassing an undisclosed stake in the company and continued to grow his position without required notification. It tracks the disdain he has shown for the company that one would have expected Musk, as its would-be steward, to protect.”

After plenty of back-and-forth, Twitter isn’t letting Musk just walk away from the deal. Now, the dispute officially heads to court in Delaware.

Related reading:

Elon Musk Calls Off $44B Deal To Buy Twitter

Photo of Elon Musk by dmoberhaus is licensed under CC BY 2.0.

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