“An offer accompanied by threats”: the revelations of the Twitter lawsuit against Elon Musk

First modification: 07/22/2022 – 18:23

In the hands of a court was the candidate for the most expensive business lawsuit in the recent history of Wall Street that faces two heavyweights: the considered richest man in the world and one of the most influential social networks.

Bad faith, hypocrisy, misuse of privileged information and even threats are just a few in a long list of accusations with which Twitter intends to show that luxury car magnate Elon Musk illegally reneged on his promise to buy the company.

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Elon Musk has backed out of the proposed $44 billion purchase, setting the stage for a legal fight that will come to light in a five-day trial in October.

In a 62-page lawsuit, Twitter demands compliance with the pact and describes in great detail how a process that barely lasted three months was developed but that, just as it started badly, threatens to end badly.

What starts badly…

According to the court document filed in Delaware, in his first flirtations with Twitter, Elon Musk made it clear that he had three options in mind: join its board of directors, privatize the social network or launch a competitor.

The first option was rejected and, among the rest, Musk seemed to lean towards the second, although, according to Twitter, it was accompanied by a threat: “This is my best and last offer and if it is not accepted, I would have to reconsider my position as shareholder”.

Elon Musk today has 9.6% of Twitter shares, making him the largest single partner.

Less than three months after making the offer, on July 8, Musk withdrew from his purchase intention, arguing that he had not obtained enough information about fake or “spam” accounts, which Twitter estimates at 5% of all users. Active users.

“When Mr. Musk started asking questions, the answers he got were alarming,” Andrew Rossman, the tycoon’s lawyer, said recently, while Twitter adds that the “accusations have no merit.”

In his lawsuit and in his earnings report for the second quarter of 2022, the social network accuses Musk of having blamed shareholders for the drop in stock prices experienced in recent weeks, in addition to his recent poor financial performance.

Twitter suspects that Elon Musk is steering everything towards his third option: creating his own competitor, for which he accuses him of obtaining, through pressure, key information such as all published tweets and favorite trends.

The multinational defends having given the businessman access to more than 50 terabytes of raw data, “despite the fact that the merger agreement did not require sharing this information.”

War for Twitter… in tweets

What better setting for this dispute than Twitter. The also owner of SpaceX has used the personal account of more than 100 million followers of his to report on every step, including his intention to “liberate the social network”.

But Twitter believes that, on the contrary, it has used this scenario to hinder the purchase agreement.

In his lawsuit, the multinational provided a series of tweets in which Elon Musk “mocks” the business with “derogatory” expressions.

Evidence was also attached that Elon Musk used threatening tones with Twitter managers. On one occasion, the company formally requested information on the status of Musk’s funding, to which he responded:

“For Musk, it seems, Twitter, the interests of its shareholders, the agreed transaction, and the judicial process to enforce it, everything constitutes an” elaborate joke “, is another of Twitter’s accusations against its adversary.

A small early win for Twitter

Five days will be enough for the specialized court in corporate lawsuits in Delaware to resolve the thorny case.

The first decision by Kathaleen St. J. McCormick, a Harvard-graduate attorney who leads the nine-judge panel, was to set the trial for October, ignoring Musk’s legal team’s request to postpone it to February and edging closer to Twitter calling for bring it forward to September.

Pending the trial, three options are currently being considered: that Musk pay the compensation of 1,000 million dollars, that they force him to consummate the agreement or that they define the matter extralegally and not continue with the trial. Twitter pursues the latter.

With Reuters, AP, AFP, EFE