The hand is with the lawyers. Twitter stock has rebounded nearly 10% since Wednesday after several sessions of decline. The day before, the publisher of the social network had formally filed a complaint against Elon Musk with the Delaware court for violation of the contract to buy Twitter for 44 billion dollars, asking the US state court to compel the billionaire to complete the contract. transaction at a price of $54.20 per share.
This price rise shows that Wall Street is anticipating punitive damages or settlement well beyond the billion dollar breach fee. Short seller Hindenburg Research said on Wednesday it had taken a long position on Twitter. ‘Twitter’s Complaint Poses a Credible Threat to Musk’s Empire’explained the firm on Twitter.
For his part, Elon Musk had terminated his contract by a letter from his lawyer, dated July 8, sent to the American stock market policeman, the Securities and Exchange Commission (SEC).
In its complaint, Twitter accuses Elon Musk of having orchestrated a public display and of believing himself above the laws of contract, after having “proposed and then signed” an amicable takeover agreement. Elon Musk believes himself “free to change your mind, demolish the company’s reputation, disrupt its operations, destroy shareholder value and leave”write the lawyers of the social network.
Twitter accuses the founder of Tesla and SpaceX of breaching their agreement and, in particular, of having contributed to lowering Twitter stock by disparaging the company. “Since signing the merger agreement, Musk has repeatedly disparaged Twitter and the deal, which has created business risk for Twitter and downward pressure for its stock,” Twitter lawyers say. In fact, the action of the social network had fallen to 34.06 dollars on Tuesday, against more than 50 dollars when the takeover offer from Elon Musk was accepted, at the end of April, by the board of directors of Twitter.
Another argument, the lawyers believe that his decision not to buy the social network is directly linked to fluctuations in its stock market price. “Rather than bear the cost of this market downturn, as the merger agreement requires, Musk wants to pass it on to Twitter shareholders”they write.
Elon Musk, he assures that the Californian firm lied to him about the number of bots (fake accounts) present on his platform. The social network maintains that they constitute less than 5% of regular users.