Twitter sues Elon Musk for backing out of the company’s $44 billion acquisition deal

Like most, if not all, social media platforms, Twitter also has its fair share of bots and spam accounts. However, Tesla CEO and the world’s richest man Elon Musk used the high number of bots and spam accounts on the platform to pull out of its $44 billion acquisition deal. And now, Twitter has sued the billionaire for doing so.

According to the social media company’s complaint filed in the Delaware Court of Chancery, the merger agreement signed by Musk accounted for some portion of Twitter’s monthly daily active users being spam or fake accounts. Therefore he is using the bots as an “escape” to pull out of the deal.

Twitter vs. Elon Musk

Twitter calls Elon Musk’s exit strategy “a model of hypocrisy”

In early 2022, Elon Musk invested $3 billion in Twitter and acquired 10% of the company’s share. In the following months, he made buy the social media platform for $44 billion in a tweet. Accepting the offer,  Twitter and Musk signed a merger agreement in April 2022. And only three months after, Musk refused to complete the acquisition over bots, fake or spam accounts.

Now, Twitter has taken the billionaire to the court for not honoring his commitment, breaching his merger agreement’s terms, and ruining the platform’s reputation.

In the lawsuit, the social media company details the fact that Musk knew about the 5% bots on Twitter before he made the offer. Therefore, the company rejected his excuse to back out of the deal.

Musk echoed that same sentiment in the press release announcing the merger on April 25, stating that upon acquiring Twitter he would prioritize “defeating the spam bots, and authenticating all humans.”

Yet Musk made his offer without seeking any representation from Twitter regarding its estimates of spam or false accounts. He even sweetened his offer to the Twitter board by expressly withdrawing his prior diligence condition.

Twitter

Calling Musk’s exit strategy a “model of hypocrisy”, the social media company seeks that the court orders the defendant (Musk) to honor his obligation.

In Section 9.9(a), each of the parties agreed that, without posting bond or other undertaking, the other parties “shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity.”

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Addicted to social media and in love with iPhone, started blogging as a hobby. And now it's my passion for every day is a new learning experience. Hopefully, manufacturers will continue to use innovative solutions and we will keep on letting you know about them.

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