Author: Edeh KelechiÂ
According to new reports, Tesla CEO Elon Musk has countersued Twitter, a social media platform he had previously agreed to buy earlier this year. This countersuit comes months after Musk announced his withdrawal from the agreed-upon contract to purchase the social media company for $44 million.
Musk filed the countersuit quietly over the weekend, so the case’s specifics are unknown. However, in this article, we’ll discuss some of the elements that are publicly available.
Twitter vs. Elon Musk
In April, Twitter sued Musk, who planned to push the lawsuit back till possibly next year and maybe draw out the matter. However, Twitter attempted to expedite the proceedings and reduce the trial to a few days.
However, the judge did not support either option, a decision that favored the social network platform. The Delaware Court of Chancery’s Chancellor Kathaleen McCormick has ordered a five-day trial to begin in October 2022.Â
But on the same day, Elon Musk launched a countersuit against Twitter, while another Twitter stakeholder, Luigi Crispo, sued Musk for stock manipulation. Crispo holds approximately 5,500 Twitter shares and feels Tesla’s CEO owes a trustee duty to Twitter owners due to his 9.6% share in the firm and the acquisition agreement, which grants Musk a veto over the company’s decision.
According to sources, Musk purchased a significant investment in Twitter, failed to reveal it then, and then disclosed the deal only to insult the social media network and back out of the agreement. Twitter’s price suffered due to these shenanigans, while Tesla’s stock suffered as a result.
Why did Elon Musk pull out of the deal?
According to sources, Musk accused Twitter of being dishonest about the number of bot accounts and spam on its network and refusing to give him access to data regarding how Twitter handled these accounts after both parties signed the agreement.
Due to these concerns, Musk said that he would be canceling the agreement.Â
Twitter subsequently filed a lawsuit against Musk in the Delaware Court of Chancery, claiming that the deceptive account accusations were a deviation and that the CEI was bound under a merger contract to consummate the agreement at $5.20 per share. Also, Twitter’s stock closed this Friday at $41.61, the highest since Musk backed out of the contract.
Also, Tesla’s CEO’s legal team filed a confidential countersuit on Friday in Delaware, but a copy was not accessible to the general populace. Nonetheless, a version with important material suppressed could be available to the public soon.
Is there a set trial date?
Judge McCormick expedited the hearing to next week, stating that she wanted to minimize the damage to Twitter due to the deal’s ambiguity. However, both sides had accepted a trial date of October 17 and were at odds over access to internal documents, the scope of discovery, and other evidence.
Summary
More information on this case will be made accessible to the public in the coming weeks. For the time being, Elon Musk and Twitter’s ongoing legal battle may end in October or later this year.
