Twitter sues Musk... "Complete the acquisition deal at $54.2 per share"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Social networking service (SNS) Twitter filed a lawsuit on the 12th (local time) against Elon Musk, CEO of Tesla, who canceled the acquisition contract. Twitter claimed that Musk must complete the acquisition at $54.20 per share (about 71,000 won) as agreed and that he "seriously breached the contract."

According to the Wall Street Journal (WSJ) and others, Twitter submitted a complaint to the Delaware Court of Chancery on the same day. This was four days after Musk announced his intention to cancel the $44 billion Twitter acquisition deal. At that time, Musk sent a letter to Twitter stating that he would terminate the acquisition deal citing a material breach of the acquisition contract terms. He argued that Twitter did not comply with contractual obligations related to the provision of fake account status and did not seek consent for changes in business operations such as employee layoffs.

According to the complaint submitted by Twitter on the day, Twitter emphasized that Musk must fulfill the contract until the end. Regarding Musk’s declaration to terminate the deal, Twitter said it was "invalid and wrongful" and claimed that Twitter had never violated its obligations. Twitter’s legal team demanded Musk’s side to fulfill its obligations, stating that contracts with financial institutions and others were affected and that the contract had not yet been terminated. Twitter also emphasized that it cooperated with Musk according to contractual obligations.

Twitter pointed out, "Musk, who made Twitter a public spectacle and proposed and signed a seller-friendly merger agreement, clearly believes that unlike all other parties subject to Delaware contract law, he can change his mind, ruin the company, interfere with operations, damage shareholder value, and walk away." It added that as market conditions changed and Musk’s personal wealth decreased by more than $100 billion from its peak in November last year, he changed his mind, "preferring to pass the costs of the market downturn onto Twitter’s shareholders rather than bear them under the merger agreement."

Twitter also claimed that Musk could be liable financially. Twitter criticized, "Since signing the merger agreement, Musk has repeatedly disparaged Twitter and the contract, which posed risks to Twitter’s business and pressured the stock price down."

Twitter requested the lawsuit to proceed quickly in the complaint. Twitter stated, "We must protect shareholders from operational damages and ongoing market risks caused by Musk’s attempt not to honor the confidential merger agreement," making this request. WSJ explained that if the Court of Chancery classifies the case as expedited, a matter that usually takes years can be resolved within months.

CNBC reported that legal experts find it difficult to predict the outcome of this legal dispute, and that the judge could order Musk to complete the contract, pay a $1 billion penalty, reach a settlement, renegotiate the acquisition price, or allow Musk to terminate the contract without paying separately, among various scenarios.

This content was produced with the assistance of AI translation services.