Twitter is suing Elon Musk in an attempt to force the world’s richest man to purchase the social media platform.
The Tesla CEO abandoned his bid for the company on Friday in a dispute over ‘bot’ accounts, but his decision has now been referred to a court in Delaware.
Musk had agreed to pay $44bn – around £37m – for the firm prior to the deal breaking down, but Twitter has accused him of “trashing the company, disrupting its operations, destroying stockholder value, and walking away”.
A lawsuit filed on Tuesday also claimed that Musk’s real motivation for pulling out of the deal was the fall in Tesla’s stock price – which had contributed to a $100bn drop in his personal wealth since November last year.
Twitter has previously argued that only 5% of its 200 million users are so-called “bot” accounts designed to manipulate information on the platform.
However Musk, who had promised to relax content restrictions and rid the social network of fraudulent users, said he believes the figure is actually closer to 20%.
He demanded proof of Twitter’s metric before the sale could proceed as planned in April but has alleged that information has not been forthcoming.
Those claims caused Twitter’s share price to fall to $50 in May – over $4 lower than its peak.
“Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he – unlike every other party subject to Delaware contract law – is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away,” a legal filing alleged.
“The value of Mr Musk’s stake in Tesla, the anchor of his personal wealth, has declined by more than $100bn from its November 2021 peak. So Musk wants out.
“Rather than bear the cost of the market downturn, as the merger agreement requires, Musk wants to shift it to Twitter’s stockholders.”
Twitter president Bret Taylor wrote: “The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement.
“We are confident we will prevail in the Delaware Court of Chancery.”