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Twitter sues Elon Musk over canceled takeover

Elon Musk has now canceled the Twitter takeover after all. The company wants to sue the richest man in the world for this.

Normally, you can return something you’ve bought within a certain period of time. That’s probably what Elon Musk thought. After agreeing to a takeover with Twitter in the spring of 2022, the Tesla boss and richest man in the world apparently doesn’t want to buy the social network after all. Twitter could now sue him for this – and apparently intends to do so. This could be very expensive for Elon Musk.

Twitter takeover collapses because of Elon Musk

Actually, there has been an agreement between Elon Musk and Twitter since April 2022 that the billionaire would buy the network for 44 billion US dollars. Since then, detailed negotiations have been underway. However, on Friday, July 8, 2022, Musk’s lawyers then submitted a document to the U.S. Securities and Exchange Commission EC, with which the Tesla boss officially withdraws from the purchase. The main reason given was that Twitter had stated that the number of so-called spam bots on its own platform was too low. This refers to user accounts that automatically spread propaganda, for example. Musk and his team are therefore accusing Twitter of having fewer real users than it admits. Industry experts had already seen this argument put forward by Musk in recent weeks as an instrument to push down the purchase price.

The fact that Elon Musk now wants to completely call off the Twitter takeover does not come as a complete surprise, as he had already made several hints in this regard. In response to these hints, however, Twitter had also clearly formulated its intention to take legal action. Now the head of the board of directors, Bret Taylor, announced that this would probably happen. One was also confident at Twitter to win this legal dispute.

Also interesting: Elon Musk has only played one console game in his life.

Failed takeover could be expensive for Musk

The case will thus in all likelihood end up before the court in Delaware. The small state is home to many large companies, including Facebook, Google and Apple, due to its favorable tax situation. A contractual penalty of 1 billion US dollars is in the offing. That shouldn’t hurt Musk very much. However, it is equally possible that the court will rule that he is obliged to buy Twitter. In that case, the agreed 44 billion U.S. dollars would be due. So far, Elon Musk has dodged questions about Twitter. In addition to the accusation of numerous spam bots, which Twitter has understated, there is also intransparency. However, there is no evidence that Twitter withheld information from Elon Musk and his team.

Incidentally, the Twitter takeover by Musk did not necessarily have a positive effect on the company. Since April 2022, when the takeover became known, Twitter shares have lost more than a quarter of their value, and the situation is similar for Tesla.

A little fun fact: Twitter is working on its lawsuit with the same law firm that advised Elon Musk and Tesla back in 2018. At that time, Musk had announced that he would take Tesla off the stock exchange; this did not happen in the end. However, he was accused of market manipulation by the SEC and had to pay a $20 million fine.

Sources

  • Mirror
  • Reuters

Topics

  • #aldi
  • social media