On Friday, Tesla CEO Elon Musk filed a countersuit against Twitter, amplifying the legal battle over his decision to withdraw from the $44 billion takeover agreement.
According to Reuters, Musk's lawsuit was filed just hours after Chancellor Kathaleen McCormick of the Delaware Court of Chancery ordered a five-day trial beginning October 17 to determine whether Musk can back out of the deal.
Twitter has not yet released a statement regarding the countersuit. Lawyers representing the social media platform had indicated earlier this month that they will only need four days to prove how Musk is misusing the "spam and robot" accounts as a pretext to walk away from the deal. Twitter also said that it had turned over all information about these accounts to consummate the long-pending acquisition.
Elon Must vs Twitter saga
Elon Musk began purchasing Twitter stock in January this year. Musk's stake in the microblogging platform increased to more than 5% in March 2022. Musk then contacted Twitter co-founder Jack Dorsey to talk about the "future direction of social media."
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In April, Twitter CEO Parag Agrawal announced that Musk would be joining the Twitter board, only to later announce that Musk had declined the offer. This came after Tesla CEO Elon Musk announced his intention to join the board of directors and make an offer to take Twitter private.
Musk finally offered to buy Twitter in a $44 billion deal, for $54.20 per share on April 14, 2022. In retaliation to a hostile takeover, the Twitter board adopted a defence strategy called the "poison pill" which called for shares of the platform to be bought at a discounted price. On April 25, Twitter finally accepted Musk's offer to take Twitter private.
With the talks of a possible takeover, Twitter CEO Parag Agrawal in May asked two top executives of the company, Kayvon Beykpour and Bruce Falck, to leave. He also announced a hiring freeze and other cost-cutting measures.
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In a major turn of events, Elon Musk on May 14 said that deal was "temporarily on hold" over Twitter's spam bots claims to which Agrawal responded on Twitter explaining the platform's spam calculation. He stated that they found less than 5% of its users being spam or fake accounts. Musk said that the deal cannot move forward unless information on the spam accounts is shared.
The legal battle heated up with the US Securities and Exchange Commission's announcement that it is scrutinising Elon Musk's purchases of Twitter stock on May 27.
Come June, Twitter agreed to provide Musk access to its full "firehose" of all public tweets, to comply with his demands. Musk even met Twitter employees virtually, fielding questions about content moderation, free speech and more.
Elon Musk is trying to back out of the deal to buy Twitter, alleging that the company has not complied with its contractual obligations. Musk alleged that the social media firm has made false and misleading representations regarding spam and fake accounts on the platform. This month Twitter laid off 30% of its talent acquisition team.
As the reports of Musk's legal action against the microblogging site hit the headline on Friday, its shares plunged by 0.3%.