Twitter Inc, which entered a deal with billionaire Elon Musk to be bought out, is now suing the Tesla CEO for walking out of the deal.
Musk had sent a letter to Twitter on Friday saying he was pulling out of the controversial deal he made in April to buy the platform for $54.20 per share, or $44 billion in total.
But while legal experts say the company has a strong case against Musk, they believe the company could opt for a renegotiation or settlement instead of a long court fight. In the meantime, the company has issued a memo, barring employees from talking about the deal while it's in the courts.
Here is the memo as seen and reported by The Verge:
Team,
Today we received a notice of purported termination from Elon Musk, and the Twitter Board issued the following statement in response (see our Chairman Bret Taylor’s Tweet here):
“The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.”
Given that this is an ongoing legal matter, you should refrain from Tweeting, Slacking, or sharing any commentary about the merger agreement. We will continue to share information when we are able, but please know we are going to be very limited on what we can share in the meantime.
I know this is an uncertain time, and we appreciate your patience and ongoing commitment to the important work we have underway.
Musk, who also heads SpaceX, has accused the social media giant of "false and misleading representations" about the number of fake accounts on its platform.
His lawyers also point to recent Twitter employee layoffs and hiring freezes, which they say are contrary to the company's obligation to continue operating normally.
If Twitter wins in court, the mercurial entrepreneur will, at a minimum, have to pay a few billion dollars in damages.
At worst, he could be forced to honour his commitment and buy Twitter at a price that has become exorbitant, while his fortune has melted down by tens of billions of dollars in recent months, experts have said.