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Twitter Sues Elon Musk for Breach of $44 Billion Deal, Calls His Exit Strategy ‘A Model of Hypocrisy’

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Twitter on Tuesday sued Elon Musk for breaching the $44 billion (roughly Rs. 3,50,290 crore) contract he signed to buy the tech firm, calling his exit strategy “a model of hypocrisy,” court documents showed.

The suit filed in the US state of Delaware urges the court to order the billionaire to complete his deal to buy Twitter, arguing that no financial penalty could repair the damage he has caused.

Musk’s conduct simply confirms that he wants to escape the binding contract he freely signed, and to damage Twitter in the process,” the lawsuit contended. “Twitter has suffered and will continue to suffer irreparable harm as a result of defendants’ breaches.”

The social media company’s shares edged up slightly in after-market trading when the news broke.

Legal experts and market analysts see Twitter as having a strong upper hand heading into court, Wedbush analyst Dan Ives said in a note to investors.

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“This will be a Game of Thrones battle in court with the fake account/bot issue front and center, but ultimately Twitter’s board is holding Musk’s feet to the fire to finish the deal at the agreed upon price,” Ives said.

“Overall this has been a black eye for Musk and horror movie for Twitter (and its employees) with no winners since the soap opera began in April.”

After weeks of threats, Musk last week pulled the plug on the deal, accusing Twitter of “misleading” statements about the number of fake accounts, according to a letter from his lawyers included in a US securities filing.

In his first public remarks since the announcement, Musk took to Twitter over the weekend to troll the company after it said it would sue to enforce the deal.

See also  Twitter’s Lawsuit Against Elon Musk to Be Overseen by First Female Chief Judge on Delaware’s Business Court

“They said I couldn’t buy Twitter. Then they wouldn’t disclose bot info. Now they want to force me to buy Twitter in court. Now they have to disclose bot info in court,” he wrote in a tweet, with included pictures of Musk laughing with glee.

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The termination of the takeover agreement sets the stage for a potentially lengthy court battle with Twitter, which initially had opposed a transaction with the unpredictable billionaire entrepreneur.

Twitter has defended its fake account oversight and has vowed to force Musk to complete the deal, which contained a $1 billion (roughly Rs. 7,960 crore) breakup fee.

‘Bent over backwards’

The social network says the number of fake accounts is less than five percent, a figure challenged by Musk, who says he believes the percentage is much higher.

“Twitter has bent over backwards to provide Musk the information he has requested, including, most notably, the full ‘firehose’ data set that he has been mining for weeks,” the lawsuit said.

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“From the outset, defendants’ information requests were designed to try to tank the deal.”

Musk made his unsolicited bid to buy Twitter without asking for estimates regarding spam or fake accounts, and even sweetened his offer to the board by withdrawing a diligence condition, the lawsuit said.

The way Musk used a large chunk of his Tesla shares to back financing for the deal meant that if stock in the electric car maker declined, be would have to pony up or sell more of it, according to the suit.

“Not only were there no financing or diligence conditions, but Musk had already secured debt commitments that together with his personal equity commitment would suffice to fund the purchase,” it said.

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Musk’s ability to terminate the deal to buy Twitter before the “drop-dead” date of October 24 of this year is extremely limited, and closing is subject to little more than approval of Twitter shareholders and regulatory approvals, the suit added.

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His norm-defying conduct has come as little surprise to watchers of the Tesla and SpaceX chief after years of statements that flout or test convention and sometimes provoke a crackdown from regulators.

While Twitter has asked the court to enforce the deal, the company’s legal action could yield a variety of outcomes.

“There are a range of possibilities that can come from the Delaware court including settlement, breakup fee paid, deal enforced, and a myriad of other outcomes,” analyst Ives wrote.


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Instagram Story Time Limit Increased to 60 Seconds: Report

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Instagram is reportedly increasing the time limit for Instagram Stories to 60 seconds, from the earlier limit of 15 seconds. Previously, Instagram Stories that were longer than 15 seconds would be broken up into separate segments. The social media company is said to have begun testing the change with select users towards the end of last year. Earlier this month, Instagram rolled out parental supervision tools and Family Center in India. Meta had announced the parental supervision tools and the Family Center tool back in March. The company was recently slapped with EUR 405 million (roughly Rs. 3,200 crore) fine for violating strict European Union data privacy rules.

According to a recent report by TechCrunch, Instagram confirmed that it is increasing the time limit of Instagram stories to 60 seconds from the earlier limit of 15 seconds. Previously, if a user had posted a video longer than 15 seconds, it used to get broken up into smaller segments. This made the process of uploading videos to Instagram Stories more challenging, including tagging and mentioning other users.

As mentioned earlier, Instagram is said to have begun testing the new change with select users towards the end of last year.

Earlier this month, Instagram also rolled out parental supervision tools and Family Center in India. The Family Center is a place for parents and guardians to access supervision tools and resources from leading experts. These tools will let them see the screen time spent by their kids on Instagram and impose time limits. The new parental controls are part of Meta’s attempts to protect children who actively use its social media apps.

See also  Twitter Tests New Tools to Expand Recommendations, Allows Users to Remove Unrelated Tweets From Timeline

Instagram was recently slapped with a EUR 405 million (roughly Rs. 3,200 crore) fine for violating strict European Union data privacy rules. The Meta-owned social media platform was found mishandling the personal information of teenagers. Ireland’s Data Protection Commission’s investigation revealed that Instagram displayed the personal information of users between the age of 13 and 17 years. Instagram’s parent Meta said it disagrees with the way the fine was calculated and has expressed its desire to appeal the fine imposed by the regulator.

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Elon Musk, Twitter CEO Parag Agrawal Said to Postpone Depositions Ahead of Upcoming Trial

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Tesla CEO Elon Musk won a reprieve from questioning by Twitter lawyers Monday, according to several press reports. The billionaire had been scheduled to give a deposition in his high-stakes court fight with Twitter over whether he has to follow through with his agreement to buy the social platform for $44 billion (roughly Rs. 3,37,465 crore).

Instead, Musk’s questioning was postponed to a future date. Twitter CEO Parag Agrawal, who was also scheduled to face Musk lawyers on Monday, likewise postponed his deposition, according to a person who was briefed on the matter.

The Musk postponement was reported by Bloomberg, Reuters and the Wall Street Journal, all of which attributed the information to anonymous sources.

News of the postponements fueled a brief rally in Twitter shares, which jumped 5.4 percent to $43.03 (roughly Rs. 3,500), apparently on hopes of a settlement in the case. That enthusiasm waned later in the day. Twitter shares closed Monday at $41.58 (roughly Rs. 3,300), eight cents higher than they opened.

Court watchers said that such postponements are not unusual ahead of major pretrial hearings. A hearing on several significant pretrial motions is scheduled for Tuesday.

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Both men were expected to answer questions posed by opposing lawyers ahead of an October trial that will determine who is at fault for the seeming collapse of Musk’s Twitter bid, not to mention who owes whom large sums of money as a result. The trial is set to begin October 17 in Delaware Chancery Court, where it’s scheduled to last just five days.

Musk, the world’s richest man, agreed in April to buy Twitter and take it private, offering $54.20 (roughly Rs. 4,180) a share and vowing to loosen the company’s policing of content and to root out fake accounts. In July, he attempted to back out of the deal, leveling a number of charges at Twitter as justification for his action.

See also  Twitter to Remove Accounts Inactive for Over 6 Months

Twitter subsequently sued Musk to force him to complete the acquisition.


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WhatsApp Call Links Support Rolling Out, 32-Member Group Video Call Testing Also Begins

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WhatsApp on Monday announced that it will roll out Call Links later this week.

By Gadgets 360 Staff | Updated: 26 September 2022 18:33 IST

WhatsApp Call Links Support Rolling Out, 32-Member Group Video Call Testing Also Begins

WhatsApp on Monday announced that it will roll out Call Links to allow users to start a new call or join one with a single tap. The Meta-owned messaging service will make it easier for users to share call links when the feature rolls out later this week. WhatsApp will also begin testing group video calls for up to 32 people.

This is a breaking news story. Details will be added soon. Please refresh the page for latest version.

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