Financial troubles continue for Elon Musk's X. The company is being sued for $61 million over $120 million in unpaid bills to a tech supplier.
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| The legal battles for Elon Musk's X are far from over. A new lawsuit claims the platform owes $120 million for server parts. |
California, USA, August 196, 2024:
The legal woes continue to mount for Elon Musk's X, formerly known as Twitter. The social media platform is now facing a lawsuit from Taiwanese tech firm Wiwynn, which is seeking $61 million in damages for unpaid server parts valued at $120 million.
According to the lawsuit filed in the Northern District Court of California, Wiwynn alleges that X breached a 2014 purchasing agreement by failing to pay for the components. The crux of the issue lies in the period following Musk's tumultuous takeover of Twitter in late 2022. Shortly after assuming control, Musk initiated a series of drastic cost-cutting measures, including significant layoffs and reductions in cloud spending.
Wiwynn claims that X abruptly stopped making payments for ordered server parts in November 2022, despite the company having already accumulated $120 million worth of components based on the assumption that Twitter would fulfill its obligations. Despite multiple attempts to resolve the matter amicably, X has reportedly refused to acknowledge the debt or engage in constructive dialogue.
This lawsuit adds to the growing legal challenges facing Musk and X. Several former Twitter executives, including ex-CEO Parag Agrawal, have filed lawsuits demanding a combined $128 million in unpaid severance. Former chairman Omid Kordestani is also seeking $20 million in shares, while other ex-employees are pursuing claims for unpaid bonuses.
Meanwhile, Musk has not shied away from legal action himself. He recently filed lawsuits against several advertisers, accusing them of conspiring to boycott the platform. A trade association representing these advertisers subsequently dissolved in the wake of the legal action.
The escalating legal battles are casting a long shadow over X, which has reportedly been struggling with declining revenue. As the company navigates these turbulent waters, questions about its long-term viability continue to linger.
Whether these legal issues will lead to significant financial repercussions for X remains to be seen. However, they undoubtedly add to the growing perception of instability surrounding the platform, which could potentially impact user trust and advertiser confidence.