Twitter lawsuit accuses Elon Musk of contract breach
Updated 10:50, 13-Jul-2022

Twitter sued Elon Musk on Tuesday for breaching the $44-billion contract he signed to buy the tech firm, calling his exit strategy "a model of hypocrisy," court documents showed.

The suit filed in the U.S. state of Delaware urges the court to order the billionaire to complete the merger at the agreed $54.20 per Twitter share, arguing that no financial damages could repair the damage that he has caused. 

"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," said the complaint. 

Twitter also accused Musk of "secretly" accumulating shares in the company between January and March without properly disclosing his substantial purchases to regulators, and said he "instead kept amassing Twitter stock with the market none the wiser."

The lawsuit sets in motion what promises to be one of the biggest legal showdowns in Wall Street history, involving one of the business world's most colorful entrepreneurs in a case that will turn on staid contract language. 

On Friday, Musk said he was terminating the deal because Twitter violated the agreement by failing to respond to requests for information regarding fake or spam accounts on the platform, which is fundamental to its business performance.

Twitter said it did not share more information with Musk regarding spam accounts because it feared he would build a competing platform after abandoning the acquisition.

Shares of the social media platform closed at $34.06 on Tuesday, up 4.3 percent, but sharply below the levels above $50 where it traded when the deal was accepted by Twitter's board in late April. The stock added another 1 percent after the bell. 

Musk, who is the chief executive officer of electric vehicle maker Tesla, did not immediately respond to a request for comment. 

Tesla's stock, the main source of Musk's fortune, has lost around 30 percent of its value since the deal was announced and closed on Tuesday at $699.21.

(With input from Reuters, AFP)

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