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Twitter shares plunged Monday after Elon Musk announced the withdrawal of his $44 billion takeover bid, setting the stage for a potential legal brawl.
Shares in the social media giant ended down 11.3 per cent at $32.65 in the first session after Musk revealed late Friday he was dropping the takeover plan.
Musk followed up on Sunday night with a pair of mocking tweets after the company said it would sue the billionaire entrepreneur to force the deal to go through.
In a letter Mike Ringler, a lawyer sent to a Securities and Exchange Commission filing, on Musk’s behalf, the businessman said, “Twitter has not complied with its contractual obligations.”
He claimed that Twitter did not provide Musk with the relevant business information he requested.
Musk has previously said he wanted to assess Twitter’s claims that about 5% of its monetisable daily active users (mDAUs) are spam accounts.
“Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr Musk incomplete or unusable information,” the letter read
Ringler also charged in the letter that Twitter breached the merger agreement because it allegedly contains “materially inaccurate representations.”
The accusation is based on Musk’s own preliminary review of spam accounts on Twitter’s platform.
Twitter has said it’s not possible to calculate spam accounts from solely public information and that a team of experts conducts a review to reach the 5% figure.
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