Twitter (TWTR, $32.67) shares dropped 11% on Monday after Elon Musk's attorney informed the company's board on Friday that Musk wants to scrap the $44b buyout.
Musk claims that Twitter is not being open about how much activity on the network is genuine. On May 13, after accusing Twitter of "actively resisting and thwarting" his right to information regarding the number of bots on the platform, Musk declared that the deal will be temporarily put on hold. Twitter asserts that it has provided Musk with the data he needs and that spam accounts make for only 5% of daily active users on the platform. But strangely, the issue was never resolved, and the deal is now completely off the table.
The seemingly endless drama continues despite this major update as the board chair for Twitter announced that the firm would file a lawsuit in the Delaware Court of Chancery to enforce the deal. Musk might also be required to pay a $1b breakup fee, according to attorneys.
Why it matters
The drama continues despite this significant development, as Twitter's board chair disclosed that the company would sue to enforce the agreement in the Delaware Court of Chancery. According to a letter from Twitter's legal team filed yesterday, Musk's attempt to cancel the deal is illegitimate and therefore the deal is still on. They claim that “Mr. Musk and the other Musk Parties have knowingly, intentionally, willfully, and materially breached the Agreement.”
