Musk’s tweet to his 100 million followers said: “They want to force me to buy Twitter in court.” Twitter does have grounds to seek an order requiring Musk to buy the business, despite pulling out in a dispute over the number of spam or bot accounts on the platform. But as has often been the case with the deal itself, the world’s richest man doesn’t seem to be taking the threat seriously. “Now they have to reveal bot info in court,” reads a caption on the tweet, which is illustrated by a series of photos of Musk laughing uproariously. It was followed by a photo of vintage action star Chuck Norris on a chess board, with Musk tweeting underneath: “Get cracking.” Despite being surrounded by the best advisers money can buy, Musk has had a bumpy relationship with the legal details of his now-abandoned $44bn (£37bn) acquisition of Twitter. On the one hand, his legal team has filed strongly argued disclosures against the deal citing various clauses in the deal. On the other hand, he posts poo emojis to the people he trades with. Indeed, the scatological cartoon aimed at Twitter CEO Parag Agrawal probably broke a merger agreement that Musk has now reneged on. More than two months ago, Musk signed an agreement to buy the social media platform that contained a clause pledging not to “disparage” the company or its employees. A day later Musk criticized the company’s staff on the platform, including Twitter’s legal chief Vijaya Gadde. Former Twitter CEO Dick Costolo accused Musk of bullying Gad. what happens? Make an executive at the company you just bought the target of harassment and threats. — dick costolo (@dickc) April 27, 2022 It was the first sign that Musk wasn’t taking the deal seriously, or at least he was unwilling to limit his behavior under the deal. It probably didn’t surprise Twitter, given the clause inserted into the deal and Musk’s past history on Twitter. In 2018, Musk reached a settlement with the US financial regulator over a tweet in which he said he had “secured funding” for a proposal to delist Tesla. According to a legal expert, Musk’s behavior violated the agreement, but Twitter’s desire to make the deal outweighed their concerns. “Yes, some of his tweets violated the agreement, but there’s no real solution here because it doesn’t matter how much Musk demeans Twitter. They want to make this deal,” said Brian Quinn, an associate professor at Boston College’s law school. Twitter said it would go to court in Delaware, the US state that has jurisdiction over the deal, to “enforce the merger agreement.” Her options include seeking a $1 billion break-even fee from Musk or asking a judge for “specific performance,” meaning Musk is required to go through with the agreed-upon transaction at $54.20 per share. Musk certainly assumes that Twitter will choose the latter. Musk appeared to be serious about buying the business when news of his offer broke on April 14, even if the $54.20 price implied a joke, given that “420” is slang for marijuana. The billionaire said he wanted to unleash the platform’s “tremendous potential” to strengthen free speech and democracy around the world. He told a TED conference: “Having a public platform that is massively trusted and widely inclusive is extremely important for the future of culture.” Even as it became clear that Musk was headed for the exit, he met with Twitter staff in a Q&A where he said he wanted the platform to contribute to a “better, long-lasting culture.” He was also interested enough in the business to put together a financing package that included $13 billion from banks and a commitment of more than $30 billion from his own pocket, though it included contributions from cryptocurrency trading platform Binance and tech mogul Larry Ellison. However, his cool demeanor has led some observers to question how serious he was about buying the company. If he intended to buy the company at first, a recent rout in tech stocks helped change his mind, said Drew Pascarella, a senior lecturer in economics at Cornell University. “Elon is a bold and controversial public figure. Twitter is a platinum social media platform that Elon himself has been using, controversially, for years. Getting the asset and being able to control it is the ultimate boss move,” says Drew. “I think Elon was serious, and the banks thought so too. Given what has happened to share values since the deal was signed, he risked looking very foolish by paying an outlandish price.” Shares of Twitter, down 6.5% when trading opened in New York on Monday at $34.46, are down about 20% so far this year and could be expected to fall further if Musk leaves entirely. The tech-heavy Nasdaq gives an idea of the broader market, having fallen 25% so far this year. Musk’s lawyers are among the few legal voices who believe he has a chance in Delaware. His argument centers on the accuracy of Twitter’s statement in its quarterly filings that spam accounts represent less than 5% of its active daily user base, which is currently 229 million people. Twitter has been saying this consistently since 2014 and has provided Musk with public tweet data in an attempt to convince him that its estimate is strong. Musk’s argument for overturning the deal is threefold: that Twitter breached the deal by failing to provide enough information about spam accounts; that Twitter has misrepresented the number of spam accounts in its disclosures to the US financial regulator; and that the company breached the agreement by failing to consult Musk when firing senior employees recently. Quinn and others believe Musk won’t make it. “Does Musk have strong legal arguments? In short, no,” says Quinn. Lawyers unsympathetic to Musk’s case say his requests for information were not reasonable, that he is highly unlikely to be able to prove that the spam estimate is false, and that the departure of senior executives was part of his day-to-day job of running the company . Subscribe to the Business Today daily email or follow Guardian Business on Twitter @BusinessDesk But some legal and corporate experts also believe the two sides will reach a deal to avoid a situation where Musk is forced to buy a company he doesn’t want amid a legal battle that further hurts morale and the stock price. of the Company. Whatever happens next, anyone selling a business to Musk in the future is likely to proceed with caution, according to Anat Alon-Beck, a professor and business law expert at Case Western Reserve University. “I certainly think his behavior will make it very difficult to buy other companies,” he said. But Pascarella said companies will still be on the lookout when a $220 billion entrepreneur comes calling. “No board should ignore the proposals of the world’s richest man just because of his erratic behavior,” he said, although businesses should “negotiate clear and strong deal protections.” Twitter is about to find out just how strong its protections are. In the meantime, Musk will no doubt continue to tweet on a platform he now prefers to use rather than own.
