On Tuesday, the drama between billionaire Elon Musk and Twitter escalated into the social media company filing a lawsuit to force the Tesla CEO to follow through with the $44 billion dollar deal that they made back in April.
On Friday, the SpaceX founder revealed that he planned on “terminating” the merger agreement for three reasons. The first reason has to do with the number of bot and spam accounts on the platform. He claims, first, that Twitter did not provide him with the information that he had requested about the number of bot and spam accounts on the social media site. He also claims that Twitter has been misrepresenting the number of bot accounts, which he alleges is much higher than what Twitter has previously claimed.
If that wasn’t enough, he also claims that, as part of their agreement, Twitter was supposed to consult with him before laying off any key executives. However, he alleges that Twitter did not do so when they laid off a number of high-ranking employees last month.
On Tuesday, Twitter filed a lawsuit in the Delaware Court of Chancery to force Musk to follow through with the deal, and Musk couldn’t help but find some irony in how this is all playing out.
Elon Musk Points Out The Irony In Twitter’s $44B Lawsuit
Oh the irony lol
— Elon Musk (@elonmusk) July 12, 2022
Less than an hour after news broke that Twitter had sued the world’s richest man (at least according to Forbes), the Paypal co-founder took to Twitter to post a simple statement, reading, “Oh the irony lol.”
It seems unquestionable that Musk is referring to the lawsuit, especially considering that, back in April, Twitter did not even want to go through with the deal. In fact, as The Blast previously reported, Twitter had adopted a “poison pill” defense to prevent Musk from taking over the company.
Now that he doesn’t want it, they are trying to take him to court to force him to go through with the deal. It is, as Musk pointed out, slightly ironic.
What Does The ‘Poison Pill’ Defense Mean For Twitter Now?
Now that the deal has been established, it means very little, but it does show how quickly Twitter has shifted its position from resisting Musk’s takeover of the company to taking him to court to force him to comply with their merger agreement.
The “poison pill” plan prevented Musk from buying up any more shares while they searched for alternate options to escape a potential takeover. Musk started quietly buying up shares in the company in January. He faced a lawsuit from Twitter investors for failing to disclose when he had acquired a five percent stake in the company, which is required by the SEC.
Elon Musk and Twitter did not generate headlines until the beginning of April when he became the company’s largest shareholder when he acquired a 9.2% stake in the company at the time. In a statement released back in April, Twitter said, “The Rights Plan does not prevent the Board from engaging with parties or accepting an acquisition proposal if the Board believes that it is in the best interests of Twitter and its shareholders.”
After Musk offered Bret Taylor $54.20 per share for the company, it seems Twitter changed its mind and decided to go through with the merger agreement after all.
In the latest lawsuit filed on Tuesday, Twitter slammed Elon Musk, writing:
“Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, 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.”
Financial analysts speculate that Twitter and Elon Musk will be able to reach a settlement out of court, but it still remains to be seen what will become of Twitter’s financial future.
On Monday, one day before the lawsuit was filed, Twitter shares closed at $32.65, which is far below the $54.20 per share that Musk had initially agreed to pay back in April. It remains to be seen how Twitter’s value will fluctuate in the weeks to come.