This Friday, billionaire Elon Musk moved to abandon the deal he’s been pursuing for months to purchase Twitter.
“In a regulatory filing prepared by his lawyers, Mr. Musk said he was terminating the Twitter deal because of a continuing disagreement over the number of spam accounts on the platform,” as reported by The New York Times. Despite Musk’s complaints, there’s no immediately apparent indication Twitter has actually misrepresented the number of spam accounts on its site. That’s not the end, though: according to Twitter board chairman Bret Taylor, the company was preparing to head to court to attempt to force Musk to follow through on his agreement. “The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery,” Taylor said in a Friday tweet.
“Musk signed a legally binding agreement in April to buy Twitter for $54.20 a share,” CNBC notes. “The agreement states that if either party broke off the deal, they’d be required to pay a $1 billion breakup fee.” The total Musk was preparing to spend on purchasing Twitter is $44 billion, significantly larger than the so-called breakup fee.
Ann Lipton, a professor of corporate governance at Tulane Law School who spoke to CNBC about the matter, was among experts who concluded Twitter is in the stronger position heading into what could be a relatively lengthy legal stand-off with Musk. “There’s a lot of reason to doubt that [Twitter] made such misrepresentations, but let’s assume that it did, it’s actually not a reason to cancel a merger agreement,” Lipton said, discussing allegations about spam accounts and what Twitter revealed about them. A “material breach” of the deal would only be present if “Twitter made false statements that were so egregious they’d have a long term impact on the company’s earnings potential,” as CNBC summarizes Lipton’s remarks. There’s no apparent evidence to that effect, however. Musk doesn’t appear to have addressed his attempt to get out of the Twitter deal on his highly followed account on the platform as of Saturday afternoon.
Musk has cultivated a sort of Trump-like public persona for himself, especially recently. He’s proclaimed himself an advocate for free speech, although that supposed advocacy didn’t extend to a situation involving a now former flight attendant with SpaceX who said she was sexually harassed by Musk onboard one of the company’s corporate jets. That flight attendant received a settlement payment from SpaceX and signed a non-disclosure and non-disparagement agreement. Meanwhile, no matter Musk’s pandering to the far-right with his pushes for so-called free speech, Trump seemed to celebrate the potential demise of Musk’s Twitter takeover. “THE TWITTER DEAL IS DEAD, LONG LIVE THE “TRUTH,”” Trump posted to his Truth Social platform. The reference to truth seems to reference Trump’s site, suggesting he sees Musk’s failure at securing a Twitter takeover as a boon for the Trump platform. Right-wingers who might flock to Twitter with Musk in charge are now left with Truth Social, among other alternative social sites.
