Twitter sued Elon Musk in the Delaware Court of Chancery on Tuesday after the billionaire walked out from his $44.00 billion buyout deal. The microblogging stated that Musk refuses his obligations to the company as the deal no longer serves his interests.
Accordingly, the dispute set the biggest showdowns in Wall Street history. In addition, it involves one of the world’s leading entrepreneurs in the market.
At the same time, the lawsuit marks the beginning of what could be a protracted legal battle. In a separate court filing, Twitter seeks a four-day trial in September.
Market participants expected the case after Musk stated that he will leave his plans on buying the social network. The world’s richest person noted bots on the platforms, claiming that the company didn’t give him the information he needed. Meanwhile, Twitter argued that the claims, including the prevalence of bots on the service, are just pretexts.
Legal experts stated that the result of the proceeding could be unpredictable. They cited the chances of involving a judge to force Musk to complete the deal. He can also pay a $1.00 billion breakup fee.
On the other hand, there could be scenarios including a settlement, renegotiation, or even Musk walking away without paying anything.
Musk’s Twitter Buyout Deal Timeline
Initially, Elon Musk purchased a minority stakeholder in the micro-blogging platform. Then, he became Twitter’s biggest shareholder. Soon after, he unveiled his plans to purchase Twitter for $54.20 per share in April.
Fearing a hostile takeover, the tech firm’s board adopted the poison pill defence. This strategy has prevented anyone from acquiring more than 15.00% of the company’s shares. The events took a fresh turn when Twitter agreed to sell the company for a whopping $44.00 billion.
In May, Musk threatened to scrap the deal if the site failed to prove the 5.00% spam accounts. On Tuesday, the stock traded at just about $34.00 per share, representing a 37.00% decline from the offer.
Meanwhile, Twitter attributes the weakness partially to Musk’s actions. Nevertheless, other social media companies also had their fair share of the slide during the same period.