In a countersuit that was made public on Thursday, the charges were in-depth. The complaint makes allegations of fraud and contends that Twitter made materially false representations or omissions in its Securities and Exchange Commission filings, which have the effect of distorting Twitter’s value.
Twitter’s statement was that the business “misrepresented nothing” and that its SEC disclosures are factual.
Twitter asserted that the assertion that Musk was duped into signing the merger is as improbable and untrue as it appears, and that Musk is inventing justifications to get out of the deal.
After Musk attempted to back out of a contract to buy the firm for $54.20 per share, or $44 billion, and take it private, Twitter filed a lawsuit against him last month. Twitter’s share price has dropped to $41 since Musk first proposed buying the social media platform in April, prompting some, including Twitter itself, to assume that Musk is merely negotiating a cheaper price for the business.
In response, Musk has claimed that Twitter has been deceiving investors about the number of active users it actually has by hiding information regarding the prevalence of spam and fraudulent accounts on its platform. The countersuit spends a lot of time talking about those accounts and active user counts.
Twitter has already refuted those allegations by stating that it has provided Musk with all the information he has requested.
Twitter is now suing Musk to compel him to complete the deal.
That is one of the many turns Musk’s bid for the business has taken over the past four months.
It all began when Musk declared holdings of more than 9% of Twitter’s stock in April, making him the company’s largest publicly disclosed stakeholder.
The original plan for Musk’s stake in Twitter was for him to join the board of directors. That changed eventually, and he put together an offer to purchase Twitter outright.
In a letter dated April 14 to Bret Taylor, the chairman of Twitter’s board, Musk said, “I invested in Twitter because I believe in its potential to be the platform for free speech around the globe.” I consider the right to free expression to be a social requirement for a democratic society.
In its original response to the offer, Twitter adopted a clause known as a “poison pill” that would have increased the number of Twitter shares issued in order to reduce the value of Musk’s ownership.
By the end of that month, however, Musk had submitted his 11-figure offer to acquire Twitter, and the social media company decided that Musk’s $44 billion valuation of the business represented the best value for its stockholders. On April 25, it agreed to take Musk’s offer.
In response to what he claimed were problems with the volume of phony and spam accounts on the website, Musk announced in May that he was putting the deal on hold. There are concerns about Musk’s genuine objectives behind his apparent backtracking as Twitter had long maintained in official filings that it felt no more than 5% of the accounts on its platform fell into that category.
Twitter’s share price dropped as low as $45, between Musk’s offer of $54.20 a share and his declaration that he was stopping the transaction.
Whatever the case, the current deadlock was caused by Musk and Twitter’s inability to reach a settlement. The Delaware Chancery Court, which is the primary venue in the United States for resolving business disputes, has now scheduled an October trial date for the issue to be heard by the lawyers representing Twitter and Musk.