The Days After Billionaire Tesla CEO Elon Musk Tried to exit $44 billion twitter acquisition dealThe microblogging site hit back on Monday, saying it had not breached its obligations under the merger agreement as indicated by them. Elon Musk A regulatory filing with the US Security and Exchange Commission last week said Twitter had not given them sufficient information about fake accounts on the platform, saying the company was violating “several provisions of the agreement”. As a result, Twitter shares fell more than 9 per cent on Monday.
In this scenario, the world’s richest man and social media company are up for a legal battle, with Twitter vowing to challenge Musk in court to uphold the agreement. But what’s next for both sides? Here we know.
Why does Elon Musk want to leave the Twitter deal?
In a regulatory filing on Friday, July 8, Musk’s lawyers said Twitter had failed to provide sufficient information about the number of fake accounts he had.
“The merger agreement requires Twitter to provide Mr. Musk and his advisors with all data and information that Mr. Musk requests “for any reasonable business purpose related to the termination of the transaction,” Twitter said in its contractual obligations. not followed,” said. Letter.
However, Twitter has stood its ground by repeatedly saying that it provided the data to Musk. Last month, it said Musk had been provided a firehose of public raw data on millions of daily tweets. The company said it believed there were about 5 percent of bot accounts on the platform, but Musk claimed it was much higher. But on Monday, Musk continued to taunt the company, using Twitter for what he described as a lack of data.
How did Twitter react?
Twitter was not giving up so soon, company chairman Brett Taylor announced on the microblogging platform that it was taking legal action against Musk for enforcing the deal.
“The Twitter Board is committed to closing the transaction on the price and terms agreed with Mr. Musk and plans to take legal action to enforce the merger agreement. We are confident we will win in the Delaware Court of Chancery ,” Taylor said in a tweet on July 9. A day later, it was also reported that Twitter had hired a legal team to fight against Musk in court, a news that the billionaire laughed at.
The company could have pushed for the $1 billion breakup fee that Musk agreed to pay under these circumstances. Instead, it is ready to fight to complete the purchase, which has been approved by the company’s board and which CEO Parag Agarwal insists it wants to complete.
Who will emerge as the winner?
While it is impossible to predict the winner of the legal battle, experts quoted by the Associated Press said Twitter had a strong case in this regard. The AP said in a report, “Morningstar analyst Ali Moghrabi noted that Twitter has described its presumption of fake and spam accounts over the years in regulatory filings, while explicitly noting that data samples and interpretation The numbers may not be accurate in view of the use of
On layoffs and hiring freezes at the company, Twitter could argue that market conditions forced the firm to do so — thereby not attributing the matter to Musk’s interference in the company.
According to analysts, the matter may even end on a settlement, with both sides agreeing to a lower price. However, there is a point where Musk may have to pay a $1 billion breakup fee.
(with inputs from AP)