After Musk backs out of billion-dollar acquisition, Twitter prepares the counterattack
The placement was quick, brief and direct. In the early evening of last Friday, July 8, Elon Musk ended the agreement for the purchase of Twitter, claiming that the social network had violated the terms of the contract, among them, by not providing information about fake accounts. on the platform.
The speed with which the billionaire, who owns Tesla and SpaceX, put an end to the $44 billion deal contrasts, however, with the long battle he is likely to face in the judicial sphere over the breach of the agreement, announced at the end. of April this year.
The sign that the imbroglio is just beginning is the fact that Twitter is preparing to file a lawsuit against Musk, according to people familiar with those plans heard by the British newspaper. Financial Times.
For this, the platform hired the law firm Wachtell, Lipton, Rosen & Katz, which will respond for the company’s filing of a lawsuit against the entrepreneur, later this week, in the Court of Delaware, an American state in which most public companies of the country is registered.
The law firm in question is specialized in corporate litigation and in defending companies in merger agreements terminated in that state. Wachtell, Lipton, Rosen & Katz have even worked for Musk in a lawsuit filed by Tesla shareholders, related to the company’s incorporation of SolarCity in 2017.
Not to lose the custom, Musk used Twitter to mock these possible steps of the social network in the judicial arena. In a “meme” posted in the early hours of Sunday to Monday, the billionaire jokes that the company now wants to force him to follow through with the settlement in the courts. And that, in this process, the company will have to reveal the data about false accounts that it would have withheld in the negotiation.
In practice, the simplest outcome for the end of the transaction – and the least likely – is the payment by Musk of a fine of US$ 1 billion for the closing of the deal. Turning that page, however, is not so simple, given that Twitter, in the wake of the conversations, promoted a series of layoffs, among other measures.
At the same time, the company has been feeling the effects of the withdrawal in the capital market. After ending Friday’s trading down 5.1%, the company’s shares were down about 6% before the market opened on Monday, July 11. Twitter is valued at $28.1 billion.