October 10, 2023

Elon Musk Is Being Sued By Twitter For Backing Out Of $44B Acquisition Deal

Elon Musk Is Being Sued By Twitter For Backing Out Of $44B Acquisition Deal

One of the craziest sagas in Social Media history gets even more bizarre. Billionaire Entrepreneur Elon Musk is attempting to back out of his historic acquisition of Twitter, flagging the number of bot accounts as the reason.

While this seems like an erratic backflip, Musk has been transparent from the beginning about his concern over the number of bots operating on the platform and the potential effects it could have on the revenue he will generate through the business.

Twitter claims that only 5% of all active accounts are bots, however, this is tough to prove, prompting Musk’s team to question the claim and request more user data. While Twitter has seemingly complied with these ongoing requests, Musk was left unsatisfied with the evidence. 

On Friday, Musk’s lawyer sent a letter to officially notify Twitter that he wanted out of the deal, claiming the platform failed to comply with its obligations in the merger agreement. Musk is also alleging that Twitter broke the acquisition agreement when it fired two top managers and laid off a third of its talent-acquisition team.

So what now? Well, let’s just say Twitter hasn’t taken too kindly to Musk’s change of heart…

Twitter has now revealed that they will be suing Elon in order to force him to go ahead with the $44b ($US54.20 per share) transaction.

“Musk’s exit strategy is a model of hypocrisy,” the lawsuit said, accusing the billionaire of making “bad faith” arguments against Twitter and carrying out “public and misleading attacks” on the company.

“Musk entered into a binding merger agreement with Twitter, promising to use his best efforts to get the deal done,” according to the lawsuit. “Now, less than three months later, Musk refuses to honour his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.”

While it’s hard to be certain where this lawsuit goes from here as it is still very much breaking news as this is being written, it is safe to say that we could be gearing up for one of the most high-profile cases in modern history that could be drawn out over a long period of time.

While it feels like only yesterday we were discussing strategies to prepare yourself for the Elon Musk era of Twitter, it might be wise to put those plans on hold and stick to what has worked for you on the OG Twitter in the past. For now anyway. 

Sam King

Sam King

Digital Marketing Manager

The Facebook Ads expert at SMC and brings 5 years of experience specialising in Social Media Marketing and Strategy. He's orchestrated major campaigns in education, sports, events, and eCommerce, seamlessly aligning digital marketing strategies across sectors for maximum impact.

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