Social media platform Twitter has sued Elon Musk, seeking to force him to go through with the $44 billion takeover of the company that the billionaire entertainer has said he is dropping.

Twitter filed the lawsuit Tuesday in Chancery Court in Delaware, setting up what is expected to be a lengthy legal battle.

Musk — the world's wealthiest person and CEO of Austin-based automaker Tesla — said Friday that he was calling off the deal because Twitter has failed to provide enough information about the number of fake accounts on its service. Twitter responded with a letter that claimed Musk's “purported termination is invalid and wrongful" and that the company has continued to provide the information he “reasonably requested.”

Musk in April announced he had bid $44 billion to acquire the social media platform, a deal that was agreed to by Twitter's board. But Musk has increasingly spoken out against spam bots and fake accounts on the platform in recent months. In a May tweet, he accused the company of undercounting them, claiming that at least 20% of Twitter's accounts were fake.

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In its lawsuit, Twitter alleges that Musk "refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests. 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.”

It’s not clear if Musk can actually walk out of the bid. The agreement to buy the company said that the deal has to go through unless there is a major change to Twitter's business.

In the lawsuit, Twitter argued that Musk had repeatedly disparaged the company on the Twitter website, and said he had an attitude of “disdain” creating business risk for Twitter and driving its stock price down.

“Musk’s exit strategy is a model of hypocrisy,” the complaint said.

The stock price has dropped for both Twitter and Tesla in after plans for the deal were announced. Twitter, which Musk had offered to buy at $54.20 a share, has dropped to around $34 a share. Tesla, which has dropped nearly 30% in recent months since the deal was announced, closed Tuesday at about $699 per share. Musk sold 9.6 million shares of Tesla, worth about $8.5 billion, to help pay for the Twitter purchase.

The lawsuit pointed to a Wall Street Journal report that the stock value of Tesla, where much of the billionaire's personal wealth is tied, has declined by more than $100 billion from its peak in November 2021.

“So Musk wants out. Rather than bear the cost of the market downturn, as the merger agreement requires, Musk wants to shift it to Twitter’s stockholder,” the complaint said.

The lawsuit also pointed out that because much of Musk needed to sell millions of his Tesla shares to fund his equity in the deal.

“The structure of Musk’s financing meant that the merger could become significantly more expensive for him if Tesla’s stock price were to decline (and significantly less expensive if Tesla’s stock price were to rise),” it said.

Dan Ives, an analyst with Wedbush Securities, said in a research note that the legal fight is “a disaster scenario" for Twitter and its board, saying the company “will now battle Musk in an elongated court battle to recoup the deal and/or the breakup fee of $1 billion at a minimum.”

Ives said the deal could bring some relief for Tesla's stock, which has been affected by the "will they or won't they" situation, but the carmaker's stock could still see effects as the court battle between Musk and Twitter plays out. The electric car company moved its headquarters to Austin last year.

"This soap opera has seen many twists and turns and now ultimately Twitter (and its Board) goes back to the drawing board," Ives said. "From the beginning this was always a head scratcher to go after Twitter at a $44 billion price tag for Musk and never made much sense to the Street, now it ends (for now) in a Twilight Zone ending with Twitter's Board back against the wall and many on the Street scratching their head around what is next."

On Tuesday, following news of the lawsuit being filed, Ives said Twitter's board is holding Musk's feet to the fire to finish the deal at the agreed price.

"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," Ives said. "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."

Musk, who moved to Texas in 2020, has located headquarters or opened offices for many of his other companies in Central Texas, and had the Twitter deal gone through, some experts had speculated that Musk could have opened a Central Texas office or even moved Twitter's headquarters to the region. One Central Texas rancher even offered the CEO free land to move the headquarters to rural Williamson County.

Additional material from American-Statesman wire services.

This article originally appeared on Austin American-Statesman: Elon Musk sued by Twitter after dropping $44 billion takeover bid