In a regulatory filing, Elon Musk moved to terminate the termination of his $44 billion takeover bid of Twitter. He said that the company hasn’t provided the necessary data and information he needs to assess the prevalence of fake or spam accounts. However, Twitter wants to force him to follow through. According to WSJ, the social-media powerhouse and the world’s richest person appear headed for an interesting courtroom battle. Twitter said it plans legal action and is expected to file a lawsuit arguing he is required to close the agreed-upon deal.
Twitter Chairman Bret Taylor tweeted Friday afternoon that the board plans to pursue legal action to enforce the deal at the price and terms originally agreed upon.
Experts say that Elon Musk tries to abandon a deal that he initiated citing an issue he knew about before agreeing to the transaction. Corporate law experts say Twitter appears to have better legal arguments than Elon Musk, who accused the company of breaching their contract. But is it really possible to force the eccentric billionaire to buy Twitter? There is little precedent, WSJ points out.
Musk argues that Twitter’s longtime estimate that fewer than 5% of its monetizable daily active users are spam accounts appears inaccurate, and therefore could represent a “material adverse effect.” In a courtroom battle, he has to prove that Twitter‘s actual business differs dramatically from what it agreed to buy. It is a high bar that very few buyers have ever successfully invoked. Elon Musk’s filing didn’t provide evidence to back up his assertion that the estimate was inaccurate or an alternate calculation.