Elon Musk’s heel-turn trying to get out of his very public, very legally binding contract to acquire Twitter is neither surprising nor unanticipated. Musk has a history of treating business as an elaborate Extremely Online goof, and he publicly broadcast both his plan to buy Twitter and his desire to get out of his plan to buy Twitter on — where else? — Twitter.
Twitter’s lawsuit against Musk, arguing he should in fact be bound to the legally binding contract he signed, is likewise neither surprising nor unanticipated. But the degree to which the suit seems tailor-made to challenge Musk in his domain — the world of the terminally online, Twitter itself — is.
In a literal sense, the case (PDF) is being fought out in the Delaware Court of Chancery, which is effectively the U.S. Court of Money. Thousands of business disputes large and small pass through the court every year, and it takes a special pride in its “unique competence in and exposure to issues of business law.”
But the suit is also being fought, somewhat recursively, on Twitter itself, being written in screenshot-friendly bites all but engineered to go viral.
Perhaps it was inevitable: Musk is a Twitter power-user who seemingly decided on a whim one day that he should own the bar he hangs out in. And so we find ourselves with something of a meta-lawsuit: It’s taking place on Twitter, about Twitter, using Twitter itself as the evidence.
The extremely online acquisition
Usually in a merger case, nasty tweets aren’t likely to matter much. But thanks to Musk’s history, all the shitposting isn’t just relevant to the case; it is the case.
Twitter’s lawyers are no dummies; they know exactly who they’re working with. The original definitive merger agreement Twitter entered with Musk in April contains several provisions specifically barring exactly the kind of behavior in which Musk tends to engage.
One section on public announcements, for example, says that Musk’s acquisition vehicle and Twitter “shall consult with each other before … making any public statements with respect to this agreement, and none of the parties … shall issue any such press release or make any public statement prior to obtaining the other parties’ consent.” And just in case one might wonder if tweets count as public statements, the agreement also put limits around what, specifically, Musk can tweet about the deal, allowing he “shall be permitted to issue tweets about the merger … so long as such tweets do not disparage the company or any of its representatives.”
Musk, however, did not seem to feel constrained by these clauses and has consistently tweeted basically whatever he wants about the company throughout. Nobody seems able to slow him down: Despite a settlement with the U.S. Securities and Exchange Commission limiting his tweets, a separate investigation by the SEC and a series of lawsuits from Twitter shareholders, he just keeps tweeting. His first hints about what pretext he would land on to get out of the deal (the alleged prevalence of bots on the platform) came in several tweets in May.
In the end, perhaps inevitably, he even tweeted out his plan to terminate the deal, by sharing a meme image apparently gloating that Twitter would be forced to reveal previously undisclosed information in court.
And the extremely online breakup
As it turns out, two can play at that game.
Twitter’s lawsuit is extremely aware of what Twitter is and does. Any lawsuit can lay out the facts of a legal case, but it takes a certain amount of style to come up with plain-language pull quotes that can make the rounds online. Twitter’s suit not only relies heavily on Musk’s public tweets to make its case that he stands in breach of contract, but also itself exists in highly quotable and screen-grabbable snippets.
The lawsuit itself kicks off with a bang. “Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he — unlike every other party subject to Delaware contract law — is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away,” the introduction reads. Such a perfectly quotable allegation is, alas, prevented by a page break from making a good viral image, but other carefully worded chunks of text make the rounds with panache.
Or, more succinctly:
We have now gotten to the infinitely recursive, “Inception”-level space where we have Twitter users taking and sharing screencaps of the Twitter screencaps that are in the lawsuit:
Why does it matter?
The Court of Chancery takes the business of business very seriously, and it tends to look poorly on people and companies who flout the rules. Although the Stringer Bell rule (heavily paraphrased from the NSFW original, that one should not leave written notes about one’s criminal activities) is not actually part of Delaware corporate law, it’s nonetheless generally good advice.
Musk has been trying to weasel out of the deal since only a few weeks after it was inked, but Twitter has consistently taken the position that a deal’s a deal and pushed him to hold up his end.
In reality, the deal has been a no-win situation for the Twitter board since the day it found out Musk had quietly amassed a 9% stake in the company. The company should be able to ignore an obvious troll — but this particular troll, with 101 million followers and counting, has an enormous amount of influence. His very public, very obvious trolling influences the performance of companies he talks about, and his overtures to Twitter — made with all the subtlety of a brick thrown through a window — had an impact on its performance.And with roughly $200 billion to his name (more or less), this particular troll can put his money where his mouth is, or at least could if he wanted to. Usually if a buyer shows up offering to buy your company at a major premium over your current trading price, they actually plan to follow through with it. But instead, all of Musk’s tweets make a big, visible pile of bad-faith posturing — in poop emoji form — right there on the internet for everyone to see.