A lawyer for Musk sent a letter to the company's chief legal officer requesting that the deal be terminated.
After hours on Friday, shares of the social media company were down about 7%.
In a Securities and Exchange Commission filing, Mike Ringler, an attorney for Skadden, said that he had sent a letter to the company.
Ringler said that the contract would require relevant business information from Musk, but that he didn't receive it. According to Musk, he wanted to assess the claims that about 5% of its users are fake.
Ringler claimed that the social networking site failed or refused to give this information. Sometimes it has ignored Mr. Musk's requests and sometimes it has rejected them for reasons that seem to be unjust.
Ringler said in the letter that the merger agreement had been broken because of the misrepresentations. The accusation is based on Musk's own review of accounts on the platform. A team of experts conduct a review to reach the 5% figure, but it is not possible to calculate the number of accounts that are fake.
According to Ringer, all indications suggest that several of the public disclosures made by the company are either false or misleading.
He claimed that the agreement to get Musk's consent before changing its course of business was broken by the company.
Musk wants to walk away from the deal, but it's not likely to be the end of the story.
If Musk backs out, he'll pay $1 billion. If they dispute that Musk's reasoning should let him out of the contract, they could still try to hold him to his original deal.
Musk's original terms need to be held to. Since the board accepted his offer to buy the company, the stock has plummeted. The stock price ended the day at $52.10 per share. The market close on Friday was $36. 81.
A request for comment was not responded to by the company.
This is happening. You can check back for the latest news.
All Rights Reserved © 2024
