Elon Musk’s exit strategy is a model of hypocrisy: Twitter in lawsuit

Elon Musk's exit strategy is a model of hypocrisy: Twitter in lawsuit

Twitter Inc. has filed a case against Elon Musk for walking out of the deal to acquire the microblogging platform. Last week, Elon Musk terminated his $44 billion contract in April.

Twitter, in its lawsuit, called Musk’s exit strategy “a model of hypocrisy” and “a model of bad faith.” The case has been filed at the Delaware Court of Chancery.

“Musk’s exit strategy is a model of hypocrisy. One of the chief reasons Musk cited on March 31, 2022, for wanting to buy Twitter was to rid it of the ‘[c]rypto spam’ he viewed as a ‘major blight on the user experience.’ Musk said he needed to take the company private because, according to him, purging spam would otherwise be commercially impractical,” the Twitter lawsuit read.

“In his press release announcing the deal on April 25, 2022, Musk raised a clarion call to ‘defeat[] the spam bots.’ But when the market declined and the fixed-price deal became less attractive, Musk shifted his narrative, suddenly demanding ‘verification’ that spam was not a serious problem on Twitter’s platform, and claiming a burning need to conduct ‘diligence’ he had expressly forsworn,” it added.

Twitter has also accused Musk of “escaping” the contract he signed and “damaging” the microblogging platform’s reputation.

“Musk’s conduct simply confirms that he wants to escape the binding contract he freely signed and to damage Twitter in the process. Twitter has suffered and will continue to suffer irreparable harm as a result of defendants’ breaches,” the Twitter lawsuit said.

‘Model of bad faith’

“Musk’s strategy is also a model of bad faith. While pretending to exercise the narrow right he has under the merger agreement to information for ‘consummation of the transaction,’ Musk has been working furiously — albeit fruitlessly — to try to show that the company he promised to buy and not disparage has made material misrepresentations about its business to regulators and investors,” the lawsuit read.

Twitter has repeatedly defended fake account oversight, saying it accounts for less than five percent. However, Musk believes the percentage to be much higher.

It is one of the significant reasons for Musk terminating the merger agreement, for which he will be required to “pay Twitter a termination fee of $1 billion.”


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