Twitter sues Elon Musk for pulling out of deal and accuses him of 'trashing' the company

12 July 2022, 22:33 | Updated: 12 July 2022, 23:28

Twitter has formally filed a lawsuit against Elon Musk after he pulled out of a $44b deal to take over the company.

The company has asked a Delaware court to order Mr Musk to complete the merger, at the agreed $54.20 per Twitter share.

"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," the lawsuit reads.

Mr Musk and Twitter have been bracing for a legal fight since the billionaire said on Friday he was backing away from his April agreement to buy the company.

Read more: Twitter threatens to sue Elon Musk after he pulls out of $44bn takeover deal

The chair of Twitter's board, Bret Taylor, tweeted on Tuesday that the board has filed a lawsuit in the Delaware Court of Chancery "to hold Elon Musk accountable to his contractual obligations".

The trial court in Delaware frequently handles business disputes among the many corporations, including Twitter, that are incorporated there.

The world's wealthiest person pulled the plug on the deal on Friday night.

He alleged that Twitter had failed to provide enough information about the number of fake and spam accounts on its platform.

He first agreed to buy the platform in April, promising to revive its "free speech" potential.

But he said Twitter had breached terms of an agreement and "appears to have made false and misleading representations".

His representatives also said Twitter had not provided data and information that the Tesla founder had requested - specifically about fake 'bot' accounts on the platform.

As a result of Mr Musk's decision to pull out, shares of Twitter fell 7 per cent in extended trading, well below the $54.20 that he had offered to pay for the company back in April.

Read more: Elon Musk terminates $44b Twitter deal over 'lack of data about bot accounts'

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The unravelling of the agreement is just the latest twist in a saga between the world's richest man and one of the most influential social media sites.

Much of the drama has played out on Twitter, with Mr Musk - who has more than 95 million followers - lamenting that the company was failing to live up to its potential as a platform for free speech.

Mr Musk's flirtation with buying Twitter appeared to begin in late March when Twitter said he contacted members of its board - including co-founder Jack Dorsey - and told them he was buying up shares of the company and interested in either joining the board, taking Twitter private or starting a competitor.

Then, on April 4, he revealed in a regulatory filing that he had became the company's largest shareholder after acquiring a 9 per cent stake worth about three billion dollars.

At first, Twitter offered Mr Musk a seat on its board.

But six days later, Twitter CEO Parag Agrawal tweeted that Mr Musk will not be joining the board after all.

His bid to buy the company came together quickly after that.

As Twitter executives prepared for the deal to move forward, the company instituted a hiring freeze, halted discretionary spending and fired two top managers.