Twitter fired back at Elon Musk on Monday, accusing the world’s richest person of “knowingly” breaching an agreement to purchase the social media firm, days after the Tesla chief sought to back out of the $44 billion deal.
In a letter sent to Musk, dated Sunday and filed with regulators on Monday, Twitter said it had not breached its obligations under the merger agreement as indicated by Musk on Friday for trying to end the deal.
“Twitter has not suffered and shouldn’t be prone to suffer a Company Material Opposed Effect,” it added.
The corporate has planned to sue Musk to force him to finish the deal, a threat he laughed off on Monday. Twitter is planning to file a lawsuit early this week in Delaware, people conversant in the matter told Reuters.
Twitter also said within the letter that the merger agreement remained in place, adding it will take steps to shut the deal.
Twitter’s shares ended down 11.3% at $32.65 on Monday, a 40% discount to Musk’s $54.20 bid and the most important every day percentage drop in greater than 14 months. They rose about 1% in prolonged trading.
Tesla’s shares closed down 6.6%.
Twitter has planned to sue Musk to force him to finish the deal.Nikolas Kokovlis/NurPhoto/Shutte
“Twitter’s board must contemplate the potential harm to its worker and shareholder base of any additional internal data exposed in litigation,” Benchmark analyst Mark Zgutowicz said.
Francis Pileggi, a company litigator with Lewis Brisbois in Delaware, said Musk could put bots front and center within the litigation if he defends against Twitter’s lawsuit by claiming the corporate misrepresented the number of pretend accounts.
“I’d be surprised if he’s prohibited from getting that information,” Pileggi said.
Pileggi said if the number of pretend accounts is persistently higher than the 5% estimated by Twitter, it may lead to negotiations for a reduced price for the social media platform.
Legal experts say the 16-year-old social media company has a powerful legal case against Musk, but could go for a renegotiation or settlement as a substitute of an extended court fight.
“We imagine that Elon Musk’s intentions to terminate the merger are more based on the recent market sell-off than … Twitter’s ‘failure’ to comply together with his requests,” Jefferies analyst Brent Thill wrote in a note.
“Within the absence of a deal, we might not be surprised to see the stock discover a floor at $23.50.”