Elon Musk may be preparing for the courtroom, which is the next chapter in the Twitter acquisition journey.
A $ 44 billion deal was closed between Mr. Musk and Twitter in April, and since then they have been working to close the deal. Mr. Musk requested information about the number of Twitter accounts that are bots, and Twitter provided Musk with access to its “fire hose” or stream of tweets. It continues to share additional information with him.
Thursday, Washington post The deal was at stake, and Musk’s team was “expected to take potentially drastic action.” The claim in this article couldn’t be confirmed in the DealBook newsletter, but was surprised because Twitter and its advisors didn’t think the deal was more at risk than at any other time in the last few months. ..
Mr. Musk did not respond to the request for comment. Twitter has repeatedly stated that it intends to “close the transaction and implement the merger agreement at the agreed price and terms.”
There are many “dramatic” actions that Mr. Musk can take, but since they relate to transactions, there are two clear possibilities. He can send a letter to Twitter telling him to close his transaction and can sue Twitter. These two actions can occur at the same time, but not always.
Since Twitter has announced that about 5% of users are bots since its release, there is no clear reason for Mr. Musk to break the deal. However, he may argue that this disclosure is deliberately misleading and a very high standard for legal compliance.
In that case, Twitter may counterclaim. Twitter strongly believes that the deal is on its side and will be a difficult battle for Mr. Musk. The transaction has a “specific performance clause” that the company sues him and gives him the right to force him to complete the transaction as long as the debt loan he has enclosed is intact. And even if that 5% estimate is off, Twitter warns in a regulatory filing that the number is an estimate and “may be higher than the current estimate.” The criteria for using it as a basis for getting out of a transaction are high.
An incident may occur in Delaware, where Twitter is registered. Given the size of the deal, Twitter will almost certainly seek a swift proceeding. A possible judge is Prime Minister Cataleen St. J. McCormick, who also Orlando Police Pension Fund Proceedings over Contract..
The stakes are high. The most valuable part of Twitter right now is the acquisition deal with Mr. Musk. The stock has fallen about 24% since April and is trading well below the price agreed with Mr. Musk.
Twitter puts pressure on the advertising business, freezes recruitment, Dismiss some staff.. Accepting a price lower than the price originally negotiated with Mr. Musk could expose Twitter to a derivative suit. Therefore, while proceedings can be costly, losing a transaction can be exacerbated.
