Twitter asks court to stop Musk from abandoning purchase
New York, Jul 12 (EFE).- Twitter filed suit Tuesday to compel Elon Musk to follow through on the purchase of the online platform for $44 billion as the parties agreed in April.
The CEO of Tesla and SpaceX notified Twitter last Friday that he was withdrawing from the deal because Twitter had breached “multiple provisions” of the merger agreement.
In its lawsuit, Twitter said that Musk’s violations of the merger agreement “have cast a pall over Twitter and its business.”
Twitter brought the case to Delaware’s Court of Chancery, which adjudicates many business disputes because the small Atlantic coastal state is the legal domicile of more than 1.8 million firms, including more than two-thirds of Fortune 500 companies.
“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 said.
The world’s second-richest person claimed last week that Twitter had failed to provide him with the information necessary to “make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform.”
Musk has made that accusation repeatedly, though Twitter has stuck to its assertion that the proportion of bogus accounts on its platform does not exceed 5 percent.
Rejecting Musk’s argument as a “pretext,” Twitter said Tuesday that he wants to bail out of the transaction because tech stocks are down.
Shares of Tesla have fallen roughly 30 percent since the Twitter deal was announced.
The offer made in April by the billionaire – $54.20 per share – represents a significant premium over Twitter’s share price of $39.31 prior to Musk’s acquisition of 9 percent of the company.
Twitter gained 4.3 percent Tuesday, climbing to $34.06 a share, but the company’s market capitalization has dropped by 25 percent since the merger was agreed. EFE
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