Elon Musk’s Friday revelation that he wants to back out of a $44 billion agreement to acquire the social media business has prompted a response from Twitter. And Twitter isn’t holding back, declaring unequivocally that the wealthy Tesla CEO is obligated by the contract he signed and that Musk is deliberately attempting to violate that contract by making a number of absurd justifications.
The SEC file, which was first made public late Monday, was sent in to the regulatory body on Sunday, according to Reuters. Furthermore, Twitter explicitly stated in that document that his effort to pull out of the agreement due to complaints that the service has too many bots is “invalid.”
The letter from Twitter claims that “Mr. Musk and the other Musk Parties’ putative termination is illegal and unjust, and it represents a repudiation of their responsibilities under the Agreement.”
Contrary to what you claim in your letter, Twitter has not broken any of its agreements, and it has not yet suffered from and is not anticipated to experience a Company Material Adverse Effect. The letter reads, “Mr. Musk and the other Musk Parties have knowingly, purposefully, willingly, and significantly broken the Agreement, and as a result, the alleged termination is void for the separate reason set forth above.
In accordance with the Agreement, Twitter will continue to provide Mr. Musk information when reasonably asked and to diligently take all other steps necessary to complete the deal.
Musk has stated he is worried about the prevalence of bots on the network, a problem he originally cited as a justification for purchasing Twitter and which he would want to help solve. But many critics were dubious that Musk ever intended to purchase the business from the start, suggesting other motivations. One of them was selling a ton of shares in Tesla to purchase the business—shares he sold at a time when the stock price of the maker of electric vehicles was almost at an all-time high.
This unusual journey was begun by the 51-year-old creator of SpaceX by purchasing a sizable amount of Twitter shares without declaring the transaction as required by law. However, the billionaire was legally compelled to publicly reveal once he had bought 5 percent of the firm, something he did not do and benefited handsomely from. Musk covertly acquired 9.2 percent of the company back in April, becoming Twitter’s biggest stakeholder. Then Musk attempted a hostile takeover of Twitter and threatened to sell his sizable interest if he wasn’t permitted to pay a hefty premium to purchase the business altogether.
According to Reuters, Twitter is anticipated to launch a lawsuit this week to force Musk’s hand, although it’s unclear if Musk will get away with a simple warning or be required to pay a sizable fine.
Musk has been teasing Twitter with memes over the last several days in an effort to hide the fact that his upcoming action may put him in significant legal danger.