The lawsuit details Musk’s “take it or leave it” offer to purchase Twitter for $54.20 per share, which “was a 38 percent premium over Twitter’s unaltered share price.”
The other parameters Musk presented and agreed to were, as he advertised, “seller friendly.” There is no funding contingency and no diligence condition, and Musk has personally pledged $33.5 billion to the sale, according to Twitter’s complaint.
The Delaware Court of Chancery received the lawsuit on Tuesday.
The value of Musk’s share in Tesla, the foundation of his personal wealth, has decreased by more than $100 billion from its November 2021 peak, the complaint claimed. However, the market sank after the agreement was struck. This is consistent with the strategies Musk has used against Twitter and its stockholders since earlier this year, when he started accumulating an undisclosed stake in the company and continued to grow his position without required notification. “So Musk wants out. Rather than bear the cost of the market downturn, as the merger agreement requires, Musk wants to shift it to Twitter’s stockholders.”
Musk has constantly criticized Twitter and the agreement since agreeing to buy the business, putting Twitter’s business at danger and exerting negative pressure on its share price, according to the complaint.
“Musk’s exit strategy is a model of hypocrisy”
Musk launched his bid to acquire Twitter “without seeking any guidance from Twitter regarding its estimates of spam or false accounts,” according to the lawsuit. He also “even sweetened his offer to the Twitter board by expressly withdrawing his prior diligence condition.” Musk, however, began to doubt Twitter’s estimates of spam when the market fell, and he eventually asserted that Twitter had broken the terms of the merger agreement by refusing to give him all the spam data he needed.
Twitter estimates that less than 5% of monetizable daily active users (mDAUs) are spam or fraudulent, which Musk used as the focal point of the argument. The complaint stated that Musk wanted to get away but had little room due to the merger agreement.
Two weeks after the merger agreement was completed, on or around May 9, Musk’s team requested additional information on users and spam.
Twitter stated that it continued to give Musk information about its estimation of spam, and that Musk “boasted publicly that he had violated his nondisclosure obligations” and “tweeted publicly a falsehood that Twitter’s sample size for spam estimates was simply 100.”
The lawsuit notes that Musk sent a feces emoji in response to Twitter CEO Parag Agrawal’s explanation of the spam estimate.
According to the lawsuit, Twitter made an effort to meet Musk’s demands by granting access to its data firehose.
On Friday of last week, Musk delivered a letter announcing his decision to end the merger arrangement. Twitter denied the allegations in Musk’s letter of termination, claiming that the company had not violated any of the merger agreement’s terms. Twitter’s lawsuit said that Musk is treating the merger agreement and the legal procedure as “an elaborate joke,” citing a meme he tweeted yesterday.
According to the lawsuit, Twitter is prepared to schedule a stockholder vote on the Musk acquisition as early as mid-August. According to Twitter, Musk’s actions have caused problems, and the company is requesting that the court force Musk to “consummate the closing in accordance with the terms of the merger agreement.”