Saying that Elon Musk has engaged in "bad faith" efforts, Twitter ( NYSE: TWTR ) on Tuesday filed suit against the Tesla ( TSLA ) chief executive in an effort to keep him from walking away from his $44B agreement to acquire the social-media giant.
Twitter ( TWTR ) filed the case in Delaware Chancery Court against Musk, and his X Holdings I and X Holdings II corporations, which Twitter ( TWTR ) said were formed in April for the express purpose of arranging and financing Musk's acquisition.
The lawsuit comes on the heels of Musk saying on July 8 that he was terminating his acquisition , largely due to disagreements with Twitter ( TWTR ) over the percentage of its accounts that are either fake, spam or originate from bots. In its suit, Twitter ( TWTR ) said it has cooperated fully with Musk's requests for information about fake accounts, the deal is still effect, and it asked the court to order "defendants to specifically perform their obligations under the merger agreements and consummate the closing in accordance with the terms of the agreement."
Musk's original deal set a price of $54.20 a share for Twitter ( TWTR ). However, as Musk brought up concerns about bots and fake accounts, Twitter's ( TWTR ) stock price began to fall, and speculation grew that Musk might have been trying to acquire the company at less than its original $44B price tag. By the time U.S. stock markets closed Tuesday, Twitter ( TWTR ) shares had fallen to $34.06
In its suit, Twitter ( TWTR ) blasted Musk for refusing "to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests."
Industry analysts have speculated that if a deal gets done it will have to include dropping the original acquisition price as Twitter ( TWTR ) is facing a "code red" situation regarding its survival .
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Twitter blasts Elon Musk in lawsuit seeking to uphold his $44B acquisition