July 18, 2022 – Tesla CEO Elon Musk has asked the court to reject Twitter’s request for a fast-track trial against him after the billionaire dropped his $44 billion deal to acquire the company citing “spam bot” problem on the social networking platform, according to reports.
Last week, Twitter sued Musk after he announced walking away from the deal he had proposed back in April to buy the company and take it private. Musk’s plan to terminate the $44 billion deal has set the stage for what could be a highly publicised legal battle surrounding the failed takeover. The lawsuit accuses the billionaire of making “bad faith” arguments and “public and misleading attacks” against Twitter, and calls Musk’s exit strategy “a model of hypocrisy”.
“Musk entered into a binding merger agreement with Twitter, promising to use his best efforts to get the deal done,” states the lawsuit. “Now, less than three months later, Musk refuses to honour his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.” Twitter has requested the court to begin the trial in September as the merger agreement terminates on October 25, 2022. The social media firm has asked the court to direct Musk to complete the merger. Musk had agreed to acquire Twitter at a share price of $54.20.
Musk’s lawyers, however, have filed a motion against Twitter’s request for a speedy trial against him for terminating the acquisition, calling it an “unjustifiable request”. Musk wants the trial to begin on or after February 13, 2023.
“Twitter’s sudden request for warp speed after two months of foot-dragging and obfuscation is its latest tactic to shroud the truth about spam accounts long enough to railroad defendants into closing,” Musk’s filing states, with his lawyers arguing that the dispute over spam accounts was fundamental to the firm’s value. Musk claims Twitter did not provide him data to “make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform”.
According to The Guardian, the deal could collapse if the trial begins in February and does not conclude by April 2023 as the debt funding package by banks for Musk’s Twitter takeover expires in April too.
Musk first publicly announced putting the acquisition on hold on May 13, saying that he was seeking details in support of a calculation regarding the number of spam or bot accounts on Twitter unless the company proved its claim that only five percent of total accounts on the platform were fake. Two days later, Musk followed up with another tweet saying that he had yet to see “any” analysis that confirmed that fake accounts on Twitter were less than 5 percent. Musk also posted that Twitter’s legal team complained to him that he had violated a non-disclosure agreement by revealing the sample size.
The deal was officially dropped on July 8 after a series of speculative reports on Musk’s imminent plans to walk away from the acquisition.
