Twitter’s lawyers called Tesla founder and CEO Elon Musk’s attempt to back out of the social network purchase “invalid.”
“The alleged termination of Mr. Musk’s contract is invalid and unlawful, and constitutes a repudiation of his obligations under the agreement. Contrary to the claims in your letter, Twitter has not breached any of its obligations under the agreement,” the social network’s legal team said in a letter shared by the Securities Market Commission (SEC).
Last Friday, Musk transferred to Twitter that he was renouncing the social network’s purchase contract after receiving no response from the company when requesting information about the number of false accounts found on the platform, as well as the way of company to audit and suspend them. Musk had been publicly questioning Twitter ‘s bot numbers for weeks, in what many analysts saw as an attempt to drive down the tech giant’s share price. Twitter shares plunged more than 6 percent in post-announcement trading, CNN reported.
In mid-May, the tycoon decided to temporarily suspend the purchase of Twitter , agreed at the end of last April for some 44,000 million dollars (42,156 million euros), pending details that support the company’s calculation that fake/ spam accounts make up less than five percent of users. Subsequently, through a letter sent in early June by Musk’s lawyers to the United States Securities Market Commission (SEC), the billionaire’s legal team considered Twitter’s position a “substantial breach” of its obligations under the merger agreement, for which they warned that Elon Musk “reserves all resulting rights, including his right not to consummate the transaction and his right to terminate the merger agreement.”
Musk and Twitter agreed to a penalty of 987 million euros ($1 billion) to be paid by any party that withdraws from the deal, although if Twitter intends to force the purchase under the agreed terms, things could get more complicated for the South African tycoon, according to detailed the aforementioned chain. Twitter fell 11.3% on Wall Street after Musk gave up buying the company
Twitter shares plunged 11.3% on Wall Street on Monday after tycoon Elon Musk gave up buying the social network for $44 billion.
The Twitter stock closed at $32.65, down 40% from what Musk had offered in April.
Musk’s decision to terminate the purchase agreement signed in April sets the stage for a potentially lengthy court battle with the company, which had initially opposed a transaction. The original merger agreement contained a breakup penalty of $1 billion.
Twitter has defended its oversight of the fake accounts and said it will sue to force Musk to complete the deal. Twitter’s board of directors ” is committed to closing the transaction at the price and terms agreed with Mr. Musk and plans to take legal action to enforce the merger agreement,” Twitter chairman Bret Taylor tweeted. who announced that the lawsuit will be filed in a court in the state of Delaware. Twitter says the number of fake accounts is less than 5%, but Musk believes the number is much higher. After Twitter’s challenge, Musk used the platform itself to mock the company.
“They said I couldn’t buy Twitter. Then they would not reveal information about the ‘bots’. Now they want to force me in court to buy Twitter. Now they will have to reveal the bot information in court ,” he said in a series of tweets in which he posted images of himself laughing.
One tweet featured actor and karate fighter Chuck Norris behind a chessboard. “Chukmate,” Musk wrote in a pun on “checkmate” in English.