“In April 2022, Elon Musk entered into a binding merger agreement with Twitter, promising to use his best efforts to get the deal done,” the lawsuit reads. “Now, less than three months later, Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.”
The company accuses Musk, 51, of attempting to get out of the deal due to the declining price of Tesla’s stock. “Rather than bear the cost of the market downturn, as the merger agreement requires, Musk wants to shift it to Twitter’s stockholders,” the suit reads. “This is in keeping with the tactics Musk has deployed against Twitter and its stockholders since earlier this year, when he started amassing an undisclosed stake in the company and continued to grow his position without required notification. It tracks the disdain he has shown for the company that one would have expected Musk, as its would-be steward, to protect.”
The suit claims that Musk said he intended to rid the platform of spam bots after acquiring it, only to change his stance later due to shifting prices.
Musk’s three claims to justify ending the deal are “pretexts and lack any merit,” the suit reads. “Twitter has abided by its covenants, and no Company Material Adverse Effect has occurred or is reasonably likely to occur. Musk, by contrast, has been acting against this deal since the market started turning, and has breached the merger agreement repeatedly in the process.”
Twitter has asked the Delaware court to order Musk to perform his obligations as established within the initial contract and to “consummate the closing in accordance with the terms of the merger agreement.”