Twitter has already responded to Elon Musk’s attempt to break the social network’s $44 billion purchase deal ((42,156 million euros). The company’s lawyers have described the tycoon’s attempt to withdraw from the operation as “invalid and unfair” and have accused the Tesla founder of breaching the agreement, according to a letter sent by the social network’s legal team to the Commission of the Stock Market (SEC) and Musk himself.
“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 assertions in his letter [la que envió Musk el viernes a la red social]Twitter has not breached any of its obligations under the settlement,” wrote William Savitt, a partner at Wachtell, Lipton, Rosen & Katz, the firm that has retained the internet platform for its defense.
According to Twitter’s lawyers, Musk cannot abandon the agreement since it was the founder of Tesla and his team who “knowingly, intentionally, willfully and materially” breached the terms of the agreement.
The letter cites three different clauses of the agreement that the tycoon would have skipped, according to the Financial Times. The first refers to Musk’s obligation to help prepare regulatory filings on the acquisition. The second requires you to check with Twitter before making public statements about the transaction. Under the contract, Musk “will be allowed to tweet about the merger or the transactions … as long as such tweets do not disparage the company or any of its representatives.” Lastly, the letter cites the tycoon’s duty to help raise the necessary debt and equity to fund the deal.
Regarding the second point, although the letter does not clarify what communications Twitter is referring to, Musk has not stopped writing tweets questioning the work of the social network’s board since the agreement was announced, including some about the manner of the company to audit and suspend fake accounts. This same Sunday Musk tweeted a meme with photographs of himself mocking the possibility that he would be forced to make the purchase. In a humorous tone, he assured that this would also force Twitter to reveal in court the data about the bots and the false accounts that he had been denied.
Precisely this has been the main argument used by Musk to renounce the purchase agreement. The billionaire does not believe the information offered by Twitter regarding the number of false accounts that the social network has. While it ensures that it is less than 5% of its total daily active users, the founder of Tesla suggests that it is closer to 20%, although he has not offered any evidence of this statement, and denounces that he cannot confirm the data given by the company. social network using the data that it has provided.
Musk had been publicly questioning the figures on the false accounts almost since he announced the purchase, something that many analysts have interpreted as a ruse by the tycoon to drop the share price of the social network and abandon the operation or buy it much cheaper. Yesterday, shares of Twitter fell more than 11%, the worst drop in one day in more than 14 months, placing the price of its share at $ 32.65, a far cry from the $ 54.20 agreed by the billionaire. The company was worth almost 14% less on the stock market this Monday than last Thursday, after leaving almost 4,000 million since that day.
Twitter is expected to file a lawsuit against Musk in Delaware Chancery Court in the coming days, setting off what could be a lengthy court battle. Although in the letter sent by Musk’s lawyers to the SEC they warn that the tycoon “reserves all resulting rights, including his right not to consummate the transaction and his right to terminate the merger agreement” after Twitter has “materially breached” its obligations under the agreementanalysts have also suggested that the parties could still reach an agreement or negotiate the purchase at a lower price.
Musk and Twitter agreed to a penalty of 1,000 million dollars (987 million euros) to pay for any party that withdraws from the agreement, but it seems that Twitter is willing to fight in court for Musk to execute the purchase under the terms agreed, although this entails hard wear and tear on the company, which is currently applying measures (among others, layoffs) to reduce its costs.
