Although Tesla’s boss backed out of buying the social network after months of negotiations, he in turn filed a complaint against Twitter on Friday, July 29. The trial is due in October.
Elon Musk strikes back. Although he himself is the subject of a lawsuit brought by Twitter, he, in turn, filed a complaint against the social network on Friday, July 29, according to the Wall Street Journal.
The complaint was filed in a Delaware court (USA), specializing in commercial law, in a “confidential” manner. This procedure is regularly used during litigation against listed companies in order not to disclose confidential information.
That is why the complaint has not yet been made public. According to the American newspaper, a revised version without confidential information may be available this week. This filing of a complaint adds an episode to the strategic, and now judicial, soap opera that the billionaire and the social network have been engaged in since mid-April, with the most uncertain outcome.
• Why is Twitter and Elon Musk in a lawsuit?
Since April 14, the richest man in the world has positioned himself on the takeover of the social network in an amount that estimates Twitter at $ 43 billion. From the very beginning of the talks, the tone was intense. Elon Musk threatened to “reconsider his position as a shareholder” in the social network in case of refusal.
After many twists and turns, when the number of fake accounts on the social network was at the heart of the debate, on July 8, the head of Tesla abandoned the acquisition of the American company. So on July 12, Twitter filed a complaint to force Elon Musk to honor his ransom obligation.
• What are the arguments of Elon Musk and Twitter?
The company is blaming the Tesla boss for giving up on the stock market while in complete shock. Thus, Elon Musk is showing a drop in his personal wealth of more than $100 billion from its peak in November 2021, according to the Bloomberg Billionaires Index. “Instead of bearing the cost of the market downturn as required by the merger agreement, Musk wants to pass it on to Twitter’s shareholders,” Twitter said in a statement, according to the Wall Street Journal.
For his part, the businessman would accuse the social network of lying about the actual number of its users – and this is after he accepted his offer to buy, writes the Wall Street Journal.
During the negotiations, Elon Musk wanted to ensure that Twitter did not contain more than 5% of fake accounts. This data is an indicator that is being scrutinized very carefully by social media investors. Because their revenue is based on showing ads to real internet users, fake accounts are all potential users that can’t really be monetized.
• What should be expected from the court?
The trial is to take place from October 17 within five days. The social network, which claims that less than 5% of its users are fake accounts, is seeking to enforce the agreement. For his part, Elon Musk has not yet announced the motives for his complaint.
If the judge finds that the arguments put forward by Elon Musk are not strong enough to justify a breach of contract, then the sale could be forced. As part of the talks, the parties also agreed to pay a severance pay of up to $1 billion.
If either party refuses to comply with the court’s decision, the court has the necessary powers to impose fines or even freeze assets.