Twitter Officially Sues Elon Musk, Biggest Stock Battle In US Court History

JAKARTA - Twitter Inc officially sued Elon Musk on Tuesday, July 12 for violating a deal worth 44 billion US dollars (IDR 659 trillion) to buy this social media platform. Twitter asked a Delaware court to order the world's richest man to complete the merger at a share price of $54.20 per share agreed with Twitter.

"Musk appears to believe that he, unlike every other party subject to Delaware contract law, is free to change his mind, destroy the company, disrupt its operations, destroy shareholder value, and walk away," the lawsuit said.

The lawsuit sets in motion what promises to be one of the biggest legal battles in Wall Street history, involving one of the business world's most colorful entrepreneurs in a case that will liven up quiet contract language.

On Friday, July 8, Musk said that he was ending the deal because Twitter violated the agreement by failing to respond to requests for information regarding fake or spam accounts on the platform, which are the basis of 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 on the lawsuit.

The lawsuit accuses Musk of a "long list" of merger agreement violations that "have disrupted Twitter and its business." It said for the first time that employee cuts had "increased" since the deal was announced.

Twitter also accused Musk of "surreptitiously" accumulating stock in the company between January and March without properly disclosing his substantial purchases to regulators, and "instead of continuing to accumulate Twitter stock in an unwise market."

Shares of the social media platform closed at 34.06 dollars on Tuesday, July 12, up 4.3%. But this price is still well below the ideal $50 price level at which it was trading when the deal was accepted by Twitter's board in late April.

Musk reasoned that he halted the merger due to a lack of information about spam accounts and inaccurate representation of what he said was a "material adverse event." He also said the executive's departure amounted to a failure to conduct business normally - although Twitter said it removed the language from the merger contract during negotiations.

Twitter also said it was not sharing more information with Musk about spam accounts because it feared he would build a competing platform after the acquisition.

Twitter called the excuses cited by Musk as an inappropriate "pretext" and said his decision to walk away from the deal had more to do with the stock market slump, particularly for tech stocks.

Shares of Tesla, the main source of Musk's wealth, have lost about 30% of their value since the deal was announced and closed on Tuesday for $699.21.

Legal experts say that from the information that is spread on the public Twitter will appear superior in the trial later.

"In its complaint, Twitter takes the strong position that Musk has a case of buyer remorse — and that, and not the bots, was the reason for his decision to walk away from the deal," said Brian Quinn, a professor at Boston College Law. "The facts that Twitter presents here make a very strong argument in favor of Twitter closing this deal."

Elon Musk's account is one of the most followed Twitter accounts and the lawsuit includes images of some of his tweets, including a poop emoji, which the company says violates the merger's "non-insult" clause.

Musk tweeted the emoji on May 16 in response to a pair of tweets by Parag Agrawal, CEO of Twitter, explaining the company's efforts to combat spam accounts.

It also includes an image of a text message Musk sent Agrawal after Twitter on June 28 sought assurances about Musk's financing of the deal.

"Your lawyer is using this conversation to stir up trouble," Musk said in a message to Agrawal. "It has to stop."

Twitter noted that after Musk said he was ending the deal, he tweeted on Monday, July 11, that Twitter said his request for spam was part of a plan to force spam data into the public domain.

"To Musk, apparently, Twitter, the interests of its shareholders, the transactions that Musk agreed to, and the litigation to enforce it all constituted a complicated joke," the lawsuit said.