The internet drama between Elon Musk and Twitter has been brewing for months, and you’re probably wondering when we’ll reach a resolution. Now we know: October 2022. A Delaware judge has sided with Twitter in its request for a speedy trial. The question is whether Musk will be forced to abide by the terms of his $44 billion takeover offer, which he announced he was abandoning a few weeks ago.
Musk’s stalled quest to acquire the social media platform began in secret earlier this year when the world’s richest man amassed nearly nine percent of Twitter’s stock. He then refused to join the board, which would have prevented him from attempting a hostile takeover. By April 2022, Musk offered to buy the company outright and take it private, something he apparently wanted to do with Tesla. However, the regulators gave him a slap on the wrist to signify that the deal was done when that didn’t happen. Now that the deal is falling apart, according to Law & Crime reports, Twitter wants Musk to abide by the deal and Musk has accused Twitter of scuttling the deal by providing false information.
It didn’t take long to get cold feet after receiving Kasturi’s offer. He has complained extensively about Twitter’s moderation policy, both in written word and meme format. The real target of Musk’s ire was the company’s bot count. In a previous regulatory disclosure, Twitter said it believed bots made up about five percent of accounts. Musk claims the number is higher and has demanded access to internal data to find out the truth. Twitter provided it, but Musk announced he was pulling out of the deal earlier this month.
The thing is, he signed a contract. There is a $1 billion breakup fee, but Musk cannot unilaterally exercise that clause. Twitter’s position is that it should be forced to abide by the terms of the deal, which is worth more than $44 billion. Kasturi was planning to use a combination of cash, equity and debt to finance the deal, using his Tesla stock. As Tesla’s price plunged this spring, the financial impact on Musk expanded. this may be “It’s time to fix Twitter” to “Twitter is lying to us.”
Musk’s attorneys sought a February 2023 trial date, but Twitter successfully persuaded the court to reschedule the case for five days in October 2022. It originally sought a September date, but it’s still an early win for Twitter. It’s possible that Musk could be forced to continue buying until the end of 2022, something he no longer wants to do. Twitter could win a court victory to negotiate a more favorable breakup deal, remaining independent but leaving with more of Musk’s cash.