Delaware Court of Chancery Judge Kathaleen McCormick granted a motion from Twitter Inc TWTR Tuesday seeking an expedited trial in the company's lawsuit against Tesla Inc TSLA CEO Elon Musk, which aims to force him to follow through on a buyout of the social media platform.
What Happened: McCormick ruled in favor of an expedited five-day trial to take place in October after a hearing conducted via teleconference Tuesday.
Twitter is seeking to enforce Musk’s $44-billion acquisition of the company despite Musk’s intentions to back out of the deal.
Twitter asked the judge to fast-track a four-day proceeding scheduled in September, arguing that shareholders have been left in limbo, while Musk says he needs until February to investigate spam and fake accounts on the micro-blogging platform, saying trial prep will be “extremely fact and expert intensive, requiring substantial time for discovery.”
To that end, Twitter in a filing on Monday said “the earliest possible trial date is imperative; the very public dispute harms Twitter with each passing day Musk is in breach [of contract] — millions of Twitter shares trade daily under a cloud of Musk-created doubt.”
Why It Matters: Musk has said he's pulling out of the agreement because Twitter hasn't given him information about the number of false accounts, or "bots," while Twitter said Musk has been actively trying to kill the partnership with a string of negative tweets, and the bot issue is a ruse to back out of the deal.
Musk's attorneys said the billionaire can lawfully walk away from the agreement due to Twitter's refusal to divulge confidential information regarding the platform's false accounts.
Twitter has stated in its securities filings that less than 5% of its monetizable accounts are bots, but Musk said he believes the actual percentage to be higher.
Twitter disputes this, arguing that Musk forfeited his entitlement to the data and the merger deal provides full authority to reject Musk's requests.
TWTR, TSLA Price Action: Shares of Twitter were trading 3.65% higher to $39.79 Tuesday afternoon, while Tesla shares were up 0.95% at $728.47.
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