Musk, who initially called his desire to take over Twitter in grandiose terms “important for the future of civilization,” attributed his change of heart to concerns about the number of bots and spam accounts on the platform. He accused Twitter of violating the agreement (a binding agreement he signed without negotiating in connection with a supply of data related to bots) by not passing on the information he says he needs to assess the magnitude of the problem.
In his suit, Twitter (TWTR) tries to paint a different picture: that of a mercurial billionaire who had buyer’s remorse after the tech market, as well as Twitter stocks, fell amid rising interest rates, inflation and fears of a recession. He also points out that parts of You’re here (TSLA), which Musk relies on to fund much of the deal, have fallen sharply in recent weeks. “Musk’s financing structure meant that the merger could become significantly more costly for him if Tesla’s stock price were to decline,” the complaint notes.

The 62-page document, which is peppered with memes, tweets and a certain emoji, effectively highlights the bizarre spectacle of the deal from the start to its current situation. It also shows the unusual position Twitter finds itself in now. The company paints Musk as an unserious potential owner – at one point alleging he has “contempt” for the company, and at another saying, “Musk’s strategy is…a model of bad faith” — while seeking to coerce him into owning it. could also end with a settlement.)

Musk did not respond to a request for comment on the lawsuit. In a Tuesday night tweet shortly after the lawsuit dropped, he said, “Oh the irony lol.”

Here are some of the highlights of Twitter’s complaint against Musk.

Twitter denounces Musk’s about-face on bots

In his letter seeking to end the deal, Musk accused Twitter of making “materially inaccurate” statements regarding the number of fake accounts and spam on the platform, and of not providing him with enough information. data to assess the problem. In its complaint, Twitter attempts to refute these claims by explaining how Musk went from wanting to buy the company in order to address the bots to wanting to quit the deal because of the bots.

On April 9, the day Musk said he wanted to buy Twitter instead of joining its board, the lawsuit alleges Musk texted Twitter chairman Bret Taylor for him. saying that the platform’s ‘fake user purge’ had to be done in the context of a private company because he thought it would ‘make the numbers look terrible,'” according to the filing. On April 21, days before Signing the deal, Musk tweeted, “If our Twitter bid succeeds, we’ll beat the spambots or die trying!”

Basically, according to the complaint, “Musk made his offer without seeking any representation from Twitter regarding his estimates of spam or fake accounts.”

In the weeks following the deal, Musk began to worry that the number of spam and fake accounts could be higher than the 5% monetizable daily active users (mDAUs) that Twitter has publicly reported. On May 13, Twitter held a two-hour due diligence meeting with Musk and explained that its spam estimation process involves daily sampling of a total set of approximately 9,000 accounts per quarter that are manually reviewed, according to the complaint. Later that day, Musk tweeted that the company uses a random sample of 100 accounts to estimate the prevalence of spam accounts.

Twitter — which, under the agreement, retained the right to determine whether a request for information was “reasonable” — says it has continued to try to share information with Musk, including, on May 21, “ a detailed summary document outlining the process the company uses to estimate spam as a percentage of mDAU.” However, Musk “showed little interest in understanding Twitter’s process for estimating spam counts,” according to the complaint.

“In a June 30 conversation with [Twitter CFO Ned] Segal, Musk acknowledged that he had not read the detailed summary of Twitter’s sampling process provided in May,” the complaint reads. “Once again, Segal offered to hang out with Musk and review the detailed summary of Twitter’s sampling process, as the Twitter team had done so with Musk’s advisers. This meeting never took place despite multiple attempts by Twitter.

poo emoji

As part of the acquisition deal, Musk agreed not to post any tweets that “disparage the company or any of its representatives.”

The Twitter lawsuit lists various instances where Musk appeared to disparage Twitter after the deal was signed. One example: After Twitter CEO Parag Agrawal tweeted an explanation of the company’s process for measuring spam accounts, “Musk responded with another derogatory tweet,” the complaint states. Inserted into the court filing is said tweet, which contains, simply, a poo emoji.

Musk’s thoughts on creating a competitor on Twitter

In the days leading up to the revelation of his significant Twitter stake, Musk tweeted that he was seriously considering creating a rival social media platform. Apparently, he was also threatening to take such a step directly to Twitter management at the time.
Elon Musk's bumpy road to eventually owning Twitter: A timeline

On March 26, Musk met with Twitter founder Jack Dorsey and board member Egon Durban to discuss “the future of social media and the prospect of Musk joining the Twitter board. “, according to the complaint. “Soon after, Musk told Twitter CEO Parag Agrawal and Twitter Chairman Bret Taylor that he had three options in mind regarding Twitter: join its board, privatize business or create a competitor,” the filing said.

To duty of care or not to duty of care?

Much has been focused on the fact that Musk signed a binding agreement without first doing any due diligence on Twitter. In his termination letter on Friday, Musk’s lawyers pushed back on that idea, pointing out that “he negotiated access and information rights under the merger agreement precisely so that he could review data and information material to Twitter’s business prior to funding and completing the transaction.”

However, Twitter alleges that after initially making an offer contingent on due diligence, Musk secured funding commitments for the deal, then submitted an updated offer on April 21 stating that his offer was “no longer subject to the companies’ due diligence”.

In his securities filings, Musk described his offer as “seller-friendly.” The company’s complaint states that “Twitter had taken Musk’s supposedly ‘vendor-friendly’ proposed deal and secured other key concessions to make it even better. Not only were there no financing terms or due diligence, but Musk had already secured debt commitments which, together with his personal equity commitment, would be sufficient to fund the purchase.”

Disagreement over Twitter employees

In his termination letter, Musk alleges that Twitter breached its obligation to obtain consent before deviating from its commitment to conduct business “in the ordinary course” when it terminated two senior executives last month and, most recently when he announced he would. lay off a third of its talent acquisition team.
Twitter is laying off a third of its talent acquisition team

However, Twitter claims that as part of the acquisition deal, it negotiated the ability to hire and fire employees at all levels without seeking Musk’s consent.

“Musk’s original draft of the merger agreement would have viewed the hiring and firing of an employee at the level of vice president or above as an alleged breach of normal course covenant absent the Musk’s consent,” the complaint reads. “Twitter successfully struck this provision before signing.”

Additionally, Twitter alleges that Musk “withheld consent to two employee retention programs designed to retain top talent selected during a time of intense uncertainty generated in large part by Musk’s erratic conduct and public disparagement of the company”.