Twitter sued Elon Musk on Tuesday $44 billion deal breached Asked to buy the social media platform and order a Delaware court to complete the merger with the world’s richest man for $54.20 per Twitter share, according to a court filing.
“Musk expressly believes that he – unlike every other party subject to Delaware contract law – is liable to change his mind, trash the Company, disrupt its operations, destroy stockholder value, and walk away.” is free,” the lawsuit said.
The lawsuit sets in motion what promises to be one of the largest legal demonstrations in Wall Street history, involving one of the business world’s most colorful entrepreneurs who will turn to static contract language.
On Friday, Musk said he was terminating the deal because Twitter violated the agreement by failing to respond to requests for information about fake or spam accounts on the platform, which is fundamental to its business performance.
Musk, who is the chief executive officer of electric vehicle maker Tesla Inc., did not immediately respond to a request for comment.
The lawsuit accused Musk of “a long list” of breaches of the merger agreement that have “cast a moment on Twitter and its business.”
Shares of the social media platform fell to $34.06 on Tuesday, well below levels above $50 when the deal was accepted by Twitter’s board in late April.
Musk said he was terminating the merger due to a lack of information and misrepresentations about spam accounts, which he said were a “material adverse event.” He also said the executive departure amounted to a failure to do business in the normal course, as Twitter was obliged to do.
Twitter said it was in talks to remove the language of the merger agreement, which made such firing a violation of the normal course requirement.
Twitter called the reasons cited by Musk an “excuse” that lacked merit and said his decision to walk away had more to do with the stock market crash, especially for tech stocks.
Tesla’s stock, the main source of Musk’s fortune, has lost 30% of its value since the deal was announced and closed Tuesday at $699.21.
Legal experts have said that information going public appears to suggest Twitter has the upper hand in the way Musk negotiated the deal, refusing to perform traditional pre-merger due diligence.
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