In a nutshell: Elon Musk seems to be making good on his earlier threats to stroll away from the 44 billion greenback deal to purchase Twitter. The SpaceX CEO’s authorized staff filed a letter with securities regulators, claiming the media large and Musk entered into the acquisition settlement primarily based on false and deceptive representations. Unfortunately for Musk, Twitter’s Board of Directors disagrees and is gearing up for authorized actions to carry him accountable for the initially negotiated multi-billion-dollar price ticket.
The letter, filed by Musk’s authorized counsel on Friday, claims Twitter’s representatives didn’t adjust to contractual obligations to supply info concerning the prevalence of bots, spam accounts, and different faux accounts throughout the platform. Musk’s authorized staff consultant Mike Ringler says Twitter has ignored requests for info a number of instances, offered unjustified rejections to queries, or responded to Musk with incomplete or inaccurate info whereas claiming they’ve complied with full disclosure.
Musk’s claims that Twitter has not been forthcoming with account-related information is nothing new. The statements stretch again to May when the outspoken CEO acknowledged the buyout was on maintain till Twitter offered information supporting claims in a beforehand printed Reuter article. Musk and his staff stay adamant that the knowledge is important to conduct a radical evaluation of bots and different faux accounts throughout the social media platform.
Twitter representatives don’t seem like taking the accusations mendacity down. Despite the claims that the media platform has been withholding info related to the negotiated acquisition, the pinnacle of Twitter’s Board of Directors, Bert Taylor, was clear that the corporate would pursue authorized motion and supposed to implement the beforehand negotiated acquisition phrases.
The Twitter Board is dedicated to closing the transaction on the value and phrases agreed upon with Mr. Musk and plans to pursue authorized motion to implement the merger settlement. We are assured we’ll prevail within the Delaware Court of Chancery.
— Bret Taylor (@btaylor) July 8, 2022
While the result is but to be decided, information of Musk’s intent already appears to have impacted Twitter’s backside line. Financial information confirmed inventory values dropping between 5% and 6% on the heels of his statements.
There’s no authorized assure that Musk shall be allowed to stroll away from the already negotiated multi-billion greenback deal. According to the standing settlement, both Twitter or Musk may very well be accountable for a one-billion-dollar break-up payment ought to both get together stroll away from the agreed-upon supply.
There are additionally a number of different potential outcomes, starting from a renegotiated buy value or break-up penalties to a different bidder stepping up in an try to take over the acquisition. Any guesses as to the result shall be nothing greater than hypothesis till extra info turns into obtainable.