Thursday, Jul 14, 2022, 16:12 Economy

Twitter Files Suit Against Elon Musk

The first information concerning Elon Musk's desired acquisition of Twitter came out in April. Just beforehand, Musk had already invested US$3 billion in the social media company's stock – and after a failed hostile takeover, the Space X/Tesla CEO and Twitter agreed upon a sale for approximately US$44 billion. Musk's intention with the purchase was to transform Twitter's Terms of Service and moderation policies to allow for more "freedom of speech" – a notion which many conservatives have voiced concerning social media, particularly following Donald Trump's ban from Twitter.

Musk Voices Concern
However, as early as one month later, Musk began to voice his doubts concerning the deal and accused Twitter of distorting or even falsifying the actual number of live accounts on the site by including bots in the count to jack up its own value for the sale.



Sale Broken – Contract Breached
Over this weekend, news was released that the Twitter takeover would no longer take place. Although technically a breach of contract on Musk's part, it's also a big hit for Twitter to absorb. Such failed corporate deals can greatly affect the value of the company in question, especially when widely reported in the media.The move is bad news for Twitter, and if no more than pure conjecture on Musk's part – inherently irresponsible. Such occurrences also make negotiations with other interested parties more difficult for the social media service.

Bots Or Stock Price
Officially, Musk's line of argument is that Twitter has exaggerated its actual number of users, by inflating the count with bots (non-human accounts that post spam content). However, there's speculation that the reasoning is actually entirely different – stock values of various tech companies have fallen considerably since the beginning of this year as the world begins to recover from COVID-19 and seems staged to enter a new global recession as a result of the inflation crisis and the war in Ukraine. The logic would follow that Musk is simply searching for any excuse to back out of the deal now.

Suit Filed In Delaware
Twitter has now filed a lawsuit against Elon Musk for failing to abide by his contractual obligations – meaning, Twitter demands that he go through with the purchase. Musk, meanwhile, is trying to justify his actions with a rather flimsy argument. Although the preliminary contract does contain a damage clause of US$1 billion should either party fail to meet its contractual obligations, Twitter seems interested in a complete sale rather than compensation for damages. Twitter plans to drill out the matter in court as early as September 2022.

Musk – "The Irony"
In his usual, passionate Twitter-posting manner, Musk (the man who accused a diver who saved 12 children in Thailand of being a "pedo" via Twitter for refusing a non-sensical offer for help after Musk self-importantly showed up on the scene following news of the trapped children) described the turn of events in the following extremely mature manner:

Exactly how the matter will play out in court is difficult to foresee. It's possible, but unlikely, that both parties will come to an agreement before any judicial appearances. If not – then a years long legal process is to be anticipated.

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