Twitter Plans to Hold Elon Musk ‘Fully Accountable’, Lawsuit Seen as ‘Very Strong’
2022.07.14 13:53
Twitter Plans to Hold Elon Musk ‘Fully Accountable’, Lawsuit Seen as ‘Very Strong’
Parag Agrawal, Chief Executive Officer of Twitter (NYSE:TWTR), informed his employees that the social media giant plans to hold Elon Musk “fully accountable to fulfill his contractual obligations.”
In an email to staff, Agrawal said he believes Twitter will prevail and “prove our position in court.”
“We took this opportunity to tell our story and defend our company, our people, and our stockholders.”
“The coming weeks will be filled with news and noise about this case, with increased analyst and reporter speculation about what may unfold. Some of the coverage will be helpful to explain this complicated process, but a lot of the speculation will be distracting,” Agrawal wrote.
Moreover, the company’s top executive also warned about the challenging environment that “presents additional complexities and challenges for us and our industry.”
In a separate filing, Twitter said that Musk’s purported termination is “invalid and wrongful.”
Twitter’s lawyers described Musk as “a model of hypocrisy” in the lawsuit filed with the court in Delaware. In addition, Musk’s strategist is described as “a model of bad faith.”
“Rather than bear the cost of the market downturn, as the merger agreement requires, Musk wants to shift it to Twitter’s stockholders. This is in keeping with the tactics Musk has deployed against Twitter and its stockholders since earlier this year, when he started amassing an undisclosed stake in the company and continued to grow his position without required notification,” the lawsuit reads.
“It tracks the disdain he has shown for the company that one would have expected Musk, as its would-be steward, to protect. Since signing the merger agreement, Musk has repeatedly disparaged Twitter and the deal, creating business risk for Twitter and downward pressure on its share price.”
Wedbush analyst Dan Ives said the Street sees Twitter’s lawsuit as “very strong.”
“The Street is interpreting the Twitter suit against Musk filed last night as “extremely compelling” as Twitter walks into Delaware court with a clear upper hand in the eyes of the Street. While we assign fair value for Twitter as $30, the stock is now factoring in some significant chance that Musk will ultimately have to pay Twitter a settlement well north of $1 billion and in a possible scenario ultimately still have to buy the company at the agreed upon price at $54.20,” Ives told clients in a note.
Yesterday, short-seller Hindenburg Research says it has accumulated a significant long position in shares of Twitter as the company’s lawsuit “poses a credible threat to Musk’s empire.”
By Senad Karaahmetovic
