Amid the ongoing legal tussle with the world's richest man and electric vehicle giant Tesla Inc. CEO Elon Musk, social media platform Twitter Inc. has shot a letter to him, saying he "knowingly" breached the $44-billion deal. The deal collapsed after Musk accused Twitter of failing to provide information on the total number of bot accounts and announced the termination of the deal last week.
The microblogging giant, in a letter to Musk and its latest U.S. S.E.C. filing, has said Musk's decision to end the deal is "invalid and wrongful". It says the action constitutes a "repudiation of their obligations under the agreement".
"The purported termination is invalid for the independent reason that Mr. Musk and the other Musk Parties have knowingly, intentionally, willfully, and materially breached the agreement," the Twitter letter says.
The company says that contrary to the assertions in Musk's last week's letter, Twitter has breached none of its obligations under the agreement, and the micro blogging site has "not suffered and is not likely to suffer a company material adverse effect".
Twitter clarifies that the deal is “not terminated”, and the bank debt commitment letter and the equity commitment letter remain in effect.
On sharing of information, Twitter says that it'll continue to provide information "reasonably" requested by Musk under the agreement and diligently take all measures required to close the deal.
Twitter is now planning to sue Musk in a court of law to close the deal. "Twitter reserves all contractual, legal, and other rights, including its right to specifically enforce the Musk Parties’ obligations under the Agreement," says the company.
Musk, however, laughed off Twitter's threat of suing him by sharing memes on Twitter. In one of the memes, he can be seen laughing in different postures while saying that "now they want to force me to buy Twitter in court".
Amid the negative news, Twitter's share ended 11.40% lower at $32.65 in overnight trade on Monday as compared to Friday's close of $36.85 on the New York Stock Exchange. The stock is about 40% down from Musk's agreed price of $54.20 as part of the deal. Tesla share also suffered a beating on the stock market, ending 6.55% down at $703.03 as compared to the previous session close of $752.29 on NASDAQ.
Twitter has also asked its employees not to comment on the deal publically. In an internal memo to its employees, Twitter has said they should refrain from "tweeting, slacking, or sharing any commentary" on the company's deal. The Twitter memo says it's an "ongoing legal matter" and that it would continue to share information with employees but it's going to be "very limited".
On Musk's part, his reason for ending the deal is Twitter's inability to provide information on bots or fake accounts or spam accounts on Twitter. He thinks this information is crucial to Twitter’s business and financial performance and necessary to seal the deal. "Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information," his legal team says in an exchange filing.
Notably, Musk has been requesting Twitter to share info on bots and fake accounts since May 9, 2022. Musk previously also threatened to pull out of the deal for the past few days. In June, Musk warned of abandoning the deal if the microblogging platform refused to provide data and information necessary to facilitate the evaluation of spam and fake accounts.
