Twitter’s battle against Elon Musk isn’t only happening in court

The company is fighting Elon on his turf: Twitter.

A Twitter icon being overshadowed by a poop emoji.

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.

Illustration: Christopher T. Fong/Protocol

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.

For example:

Musk grasps for an out: Musk wanted an escape. But the merger agreement left him little room. With no financing contingency or diligence condition, the agreement gave Musk no out absent a Company Material Adverse Effect or a material covenant breach by Twitter. Musk had to try to conjure one of those. Screenshot: Protocol

Or, more succinctly:

"Musk responded with another disparaging Tweet," followed by a screencapture of Elon Musk tweeting a single poop emoji in response to a tweet from Twitter CEO Parag Agrawal. Screenshot: Protocol

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.

How GM plans to make its ambitious EV goals reality

The automaker's chief sustainability officer is optimistic that GM is well-positioned to rapidly scale up the EV side of its business.

"I think everything that’s been put in place to support the transition will be a real positive for the industry and for the country."

Photo: Eva Marie Uzcategui/Bloomberg via Getty Images

Automakers are on the cusp of an entirely new era.

The transition to electric vehicles is quickly becoming more than just theoretical: More models are coming onto the scene every day. This week, the Inflation Reduction Act was signed into law, enshrining a new structure for EV tax credits and offering a boost to domestic critical mineral mining. The transition isn’t coming a moment too soon, given that the transportation sector makes up the largest share of greenhouse gas emissions in the U.S.

Keep Reading Show less
Lisa Martine Jenkins

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).

As management teams at financial institutions look for best practices to make part of their regular toolkit, they are reaching most for the ones that increase the speed and reduce the risk of large-scale change.

That forward-thinking approach can lead financial institutions to leverage AI technology, which can help give decision-makers trusted tools to solve integral challenges vital to the health of the business. One of the leading providers of AI and machine-learning software, DataRobot continues to attract clients in financial services who want to de-risk their AI investments and rapidly scale AI to almost every part of their operations, resulting in improved productivity and higher customer satisfaction.

Keep Reading Show less
David Silverberg
David Silverberg is a Toronto-based freelance journalist, editor and writing coach. He writes for The Washington Post, BBC News, Business Insider, The Toronto Star, New Scientist, Fodor's, and several alumni magazines. He also writes for brands such as 23andme, Shopify and Bold Commerce. He has served as editor of B2B News Network, Canada's only B2B news magazine, and Digital Journal, a leading pioneer in citizen journalism. Find more about him at www.davidsilverberg.ca

How Embracer Group bought ‘Lord of the Rings’ rights for a bargain

The Swedish holding company, known best for its gaming acquisitions, bought the rights to “The Lord of the Rings.” But the deal is much more complicated than it seems.

Who really owns LOTR's rights?

Photo: New Line/WireImage

A new stakeholder has entered the complex licensing web of “The Lord of the Rings,” and the landmark deal has further complicated the already messy media empire surrounding author J.R.R. Tolkien’s fantasy epic.

The buyer, the acquisition-hungry Swedish gaming conglomerate known as Embracer Group, has purchased Middle-earth Enterprises, and with it the associated film, video game, board game, merchandise, theater production and theme park rights to the core LOTR book trilogy and “The Hobbit'' from its previous owner, The Saul Zaentz Company. Formerly Tolkien Enterprises, Zaentz’s holding group has held onto the rights since purchasing them from United Artists in 1976. (Tolkien initially sold them to UA in 1969, four years before his death.)

Keep Reading Show less
Nick Statt

Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.


Upstart has a new plan to sell Wall Street on its loans

The AI-powered lender will hold some loans on its balance sheet as it seeks partners for long-term capital.

Despite the current struggles, Upstart views the marketplace model as the best way to write to keep its loan business growing.

Photo: Upstart

After a revenue drop its CEO called “unacceptable,” the leadership at fintech lender Upstart is making a bet on the strength of its ability to underwrite loans with AI.

The San Mateo company is planning to leave some loans on its balance sheet that investors do not want to buy, as concerns about the economy shift Wall Street away from backing riskier consumer debt. Rather than pull back on its lending in response, the company said it will hold some loans as it seeks longer-term capital partners.

Keep Reading Show less
Ryan Deffenbaugh
Ryan Deffenbaugh is a reporter at Protocol focused on fintech. Before joining Protocol, he reported on New York's technology industry for Crain's New York Business. He is based in New York and can be reached at rdeffenbaugh@protocol.com.

Does your boss sound a little funny? It might be an audio deepfake

Voice deepfake attacks against enterprises, often aimed at tricking corporate employees into transferring money to the attackers, are on the rise. And at least in some cases, they’re succeeding.

Audio deepfakes are a new spin on the impersonation tactics that have long been used in social engineering and phishing attacks, but most people aren’t trained to disbelieve their ears.

Illustration: Christopher T. Fong/Protocol

As a cyberattack investigator, Nick Giacopuzzi’s work now includes responding to growing attacks against businesses that involve deepfaked voices — and has ultimately left him convinced that in today's world, "we need to question everything."

In particular, Giacopuzzi has investigated multiple incidents where an attacker deployed fabricated audio, created with the help of AI, that purported to be an executive or a manager at a company. You can guess how it went: The fake boss asked an employee to urgently transfer funds. And in some cases, it’s worked, he said.

Keep Reading Show less
Kyle Alspach

Kyle Alspach ( @KyleAlspach) is a senior reporter at Protocol, focused on cybersecurity. He has covered the tech industry since 2010 for outlets including VentureBeat, CRN and the Boston Globe. He lives in Portland, Oregon, and can be reached at kalspach@protocol.com.

Latest Stories