Elon Musk is a social media legend for his tweets. But now they may come back to haunt the billionaire as Twitter sues him to force him to go through with his deal to buy the social media platform.
First is Musk’s use of a poop emoji, which was posted May 16 without explanation, but was widely interpreted to be his derisive reaction to Twitter CEO Parag Agrawal’s comments about Twitter’s efforts to crack down on fake accounts, according to Business Insider.
Musk has claimed that Twitter’s estimate that 5 percent of its accounts are fake is far less than the actual number of fake accounts. He raised that issue as one reason for pulling out of the $44 billion deal.
#1 rule of Twitter:
Anything you tweet can and will be used against you.https://t.co/0QSwoyJirA
— Vlad Savov (@vladsavov) July 13, 2022
The tweet is being used by Twitter in its lawsuit to claim that Musk was really out to ruin Twitter, not buy it.
“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,” the complaint read.
“He has purported to put the deal on ‘hold’ pending satisfaction of imaginary conditions, breached his financing efforts obligations in the process, violated his obligations to treat requests for consent reasonably and to provide information about financing status, violated his non-disparagement obligation, misused confidential information, and otherwise failed to employ required efforts to consummate the acquisition,” the lawsuit read.
Based on a Wednesday tweet, the complaint does not seem to be making the SpaceX and Tesla CEO shake in his boots.
? = bs
— Elon Musk (@elonmusk) July 13, 2022
A May 17 Musk tweet raised the eyebrows of the Securities and Exchange Commission, which wrote Musk as to whether that tweet saying the Twitter purchase “cannot move forward” represented a material change in Musk’s plans, according to CNBC.
A response dated June 7 filed by Musk’s attorney, but only made public Thursday, said that “despite Mr. Musk’s desire to obtain information to evaluate the potential spam and fake accounts, there was no material change to Mr. Musk’s plans and proposals regarding the proposed transaction at such time.”
20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.
My offer was based on Twitter’s SEC filings being accurate.
Yesterday, Twitter’s CEO publicly refused to show proof of <5%.
This deal cannot move forward until he does.
— Elon Musk (@elonmusk) May 17, 2022
The SEC may look even further into the deal and Musk’s activities, according to Reuters.
“The SEC will take a look and will want to know if he’s raising pretextual excuses and, essentially, misleading shareholders in the market,” Robert Frenchman, a partner at Mukasey Frenchman LLP, said.
Among the questions could be whether Musk was intentionally trying to impact Twitter to lower its share price and angle for a better deal, Howard Fischer, a partner at Moses & Singer and a former SEC attorney, said.
“Arguably, his constant public comments … could be seen as market manipulation,” he said.
“When you’re dealing with statements about public companies that have an impact on stock prices, the SEC’s antenna goes sky-high,” Stephen Crimmins, a partner at Davis Wright Tremaine LLP and a former SEC litigator, said. “So the SEC’s got to be looking at it.”
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