Twitter filed a lawsuit Tuesday against Elon Musk after the billionaire backed out of a $44 billion agreement to buy the embattled social media company.
Musk agreed in April to buy Twitter, but he filed papers Friday with the Securities and Exchange Commission to walk away from the acquisition agreement. Now, a Delaware court could determine whether he has to buy the company that's seen both its stock and reputation plummet.
In its lawsuit, Twitter argues that Musk signed a binding agreement to a deal and he can't simply abandon it.
"Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests," Twitter argues in the suit. "Musk apparently believes that he – unlike every other party subject to Delaware contract law – is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away."
In classic Musk fashion, he responded to Twitter's lawsuit with a tweet saying "Oh the irony lol."
Oh the irony lol
— Elon Musk (@elonmusk) July 12, 2022
On Sunday, Twitter's lawyers said in a letter that Musk's attempt to terminate the deal was "invalid and wrongful," and that he "knowingly, intentionally, willfully and materially breached" a deal to buy the platform.
Twitter's suit comes after Musk accused the company of refusing to hand over information about the number of spam bots on the platform. Musk repeatedly bashed Twitter saying that he didn't believe its public statements that about 5% of its active users are bots.
Twitter says otherwise and said it has provided Musk and his team "far more information" than they are entitled to under the merger agreement.
"Twitter has bent over backwards to provide Musk the information he has requested, including, most notably, the full 'firehose' data set that he has been mining for weeks – and has been continuing to mine since purporting to terminate – with the assistance of undisclosed data reviewers," the suit said. "Musk’s conduct simply confirms that he wants to escape the binding contract he freely signed, and to damage Twitter in the process."
Twitter has warned of a Musk lawsuit before
The news that the microblogging company will be taking Musk to court over the deal came as little surprise to its shareholders.
Twitter warned of potential costs from lawsuits related to the deal in its most recent quarterly 10-Q filing with the SEC that company stakeholders should brace for potentially costly litigation.
"Regardless of the outcome of any future litigation related to the merger, such litigation may be time-consuming and expensive and may distract our management from running the day-to-day operations of our business," Twitter said in the filing. "The litigation costs and diversion of management’s attention and resources to address the claims and counterclaims in any litigation related to the merger may materially adversely affect our business, results of operations, prospects, cash flows, and financial condition.
"If the merger is not consummated for any reason, litigation could be filed in connection with the failure to consummate the merger," the filing warned.
It also said that it expected the deal with Musk or any litigation tied to the deal to possibly scare off advertisers, pressure its share price lower, and lead to an exodus of talent:
"Any litigation related to the merger may result in negative publicity or an unfavorable impression of us, which could adversely affect the price of our common stock, impair our ability to recruit or retain employees, damage our relationships with our advertisers and other business partners, or otherwise materially harm our operations and financial performance."
This is a developing story.
This article originally appeared on USA TODAY: Elon Musk sued by Twitter for walking away from $44 billion deal