Twitter Not Likely To Suffer Company Material Adverse Effect – Lawyer

Twitter's attorneys from Wachtell, Lipton, Rosen & Katz claimed in a letter to the SEC that Tesla CEO, Elon Musk's decision to end the acquisition deal was " invalid and wrongful," and "Twitter has not suffered and is not likely to suffer a Company Material Adverse Effect."

Musk and his lawyers declared last week that they are terminating the acquisition agreement with the social network due to what they claim are its "false and fraudulent statements."

Twitter stated in the letter that “Contrary to the assertions in your letter, Twitter has breached none of its obligations under the Agreement, and Twitter has not suffered and is not likely to suffer a Company Material Adverse Effect.

The purported termination is invalid for the independent reason that Musk and the other Musk Parties have knowingly, intentionally, willfully, and materially breached the Agreement.”

According to Twitter, "Musk and the other Musk Parties comply with their duties under the Agreement."

The volume of spam and false accounts on the network has been a contention between Musk and Twitter since last month, with Twitter stating that less than 5% of users are affected. Despite giving the Tesla CEO's team "firehose" access to the company's data, the team for Musk claimed that "those APIs featured a rate limit lower than what Twitter provides to its largest enterprise customers."

Twitter shares have decreased by over 10% after Musk announced the agreement will be terminated. According to a Bloomberg story, the social networking business plans to sue Musk this week.