Analysis: Twitter’s fury at Tesla CEO’s attempt to walk away from a $44bn deal is spelled out in its lawsuit
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.”
As the lawsuit states: “Employee attrition, meanwhile, has been on the upswing since the signing of the merger agreement.”The document states that Twitter is “entitled to specific performance” of Musk’s obligations under the agreement, a legal term that means requiring the Tesla CEO to buy the company for the $54.20 a share that he had signed up for .
On the alleged misrepresentation of spam accounts, Twitter says Musk has failed to show any evidence that spam accounts represent more than 5% of its 229 million-strong user base. It quotes Musk’s lawyers stating that their client “strongly believes” Twitter’s spam estimates are wrong. The company replies that believing something to be the case does not represent proof and even less so a trigger of the “company material adverse effect” clause that could allow Musk to scupper the deal.
“The merger agreement provides that if defendants are in material breach of their own obligations under the merger agreement, they cannot exercise any termination right they might otherwise have.”
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