Twitter has sued Tesla CEO, Elon Musk, to force him to follow through with his $44 billion Twitter deal. Twitter filed the lawsuit in the Delaware Court of Chancery after Musk said that he was ending his deal to buy Twitter. According to the lawsuit; “Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.”
$44 Billion Twitter Deal in Jeopardy
Earlier, Elon Musk sent a letter to Twitter informing them about the termination of the $44 billion Twitter deal citing Twitter bots as the reason and claiming that the company did not give him the information he needed to evaluate the deal. The lawsuit revealed that Musk told Parag Agrawal, Twitter’s chief executive, and board chair Bret Taylor that he had three options in mind: join the company’s board, take over the business or start a competitor.
According to the suit; “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.”
According to some experts, Musk simply wants an excuse to get out of a deal that now seems overpriced following the downturn in Twitter shares. Likewise, Tesla shares, which Musk is relying on to finance the deal, have also declined sharply. While some analysts suggested that Musk might be attempting to negotiate the deal at a lower price so that the parties could reach a settlement. Daniel Ives, an analyst at Wedbush investment firm, said; “Twitter will battle Musk in an elongated court battle to recoup the deal and/or the breakup fee of $1 billion at a minimum.”