Twitter Shareholders want Elon Musk to follow through on his promise to purchase the social media platform for $44 billion. But the tech billionaire is exerting every effort to thwart the deal.
Investors in Twitter voted on Tuesday to approve Musk’s acquisition of the company, which was first announced in April.
The main issue, however—that Musk no longer wants to purchase Twitter—was unaffected by the shareholder vote, which was merely a formality. Instead, musk is preparing for a court battle to oppose Twitter’s demand that he complete the transaction at the previously agreed-upon share price of $54.20.
The world’s richest man and CEO of Tesla and SpaceX, Elon Musk, has notified Twitter three times through legal counsel that Musk believes the terms of the acquisition agreement have been broken. Musk’s objections are “invalid and wrongful,” Twitter has repeatedly responded.
Most recently, in a letter to the social media company dated September 9, Musk’s attorneys criticized the social media platform’s severance agreement with Peiter “Mudge” Zatko, its former head of security who was let go in January, under which Zatko and his counsel received severance payments totaling $7.75 million from Twitter. That was against the terms of their agreement, which stated that social media company would not “grant or provide any severance or termination payments or benefits” without Musk’s consent.
In SEC and FTC complaints, Zatko, who has been described as a disgruntled ex-employee, claimed that Twitter had concealed, among other issues, “extreme, egregious” privacy and security lapses. On Tuesday, Zatko separated testimony before a Senate Judiciary Committee hearing in which he reiterated and expanded on his claims.
In a letter sent last month, Musk’s attorneys cited Zatko’s accusations as more proof that the agreement to buy Twitter was invalid. That came after the Musk team initially informed Twitter in July that he was terminating the agreement due to the company’s alleged inability to back up its claim that spam and fake accounts make up less than 5% of active users.
In an effort to enforce the buyout agreement, the social media company sued Musk in July. Starting on October 17, a judge in the Delaware Court of Chancery has scheduled a five-day trial to hear Twitter’s complaint against Musk. The judge presiding over the case ruled last week that Musk may add claims from Zatko’s complaint to his countersuit but denied Musk’s request to push back the trial’s start date until November.
Musk, who holds the largest single stake in Twitter with a 9.6% stake, was initially excited about the prospect of acquiring it. He floated concepts like verifying every user’s identity and charging companies to use the social network. However, the legal team for Twitter claims that Musk changed his mind after his personal wealth dropped along with Tesla’s stock price.
Twitter takes legal steps against Musk
Twitter filed a lawsuit against Musk for allegedly breaking the contract. The trial is scheduled to start in mid-October and is currently proceeding through the Delaware Court of Chancery.
Read Also: Elon Musk justifies failed Twitter bid after Whistleblower
The judge in the case recently gave Musk’s team permission to update his counterclaim against Twitter to include claims made by a former Twitter security chief who recently filed a whistleblower complaint alleging egregious securities failings by the company. Peiter “Mudge” Zatko, the whistleblower, gave testimony earlier on Tuesday before a Senate panel.
