What a great way to start out Monday morning, with the possibility that Elon Musk will fade out of the Twitter picture. What a relief. Fears that he would pollute the platform by reinstating everyone who had ever been banned are now quieting. Axios:
Elon Musk has a “right not to consummate” his acquisition of Twitter and a “right to terminate the merger agreement,” according to a letter from his lawyers to the Twitter general counsel Vijaya Gadde sent Monday morning.
Why it matters: While Musk has been tweeting about the deal being “on hold” for a while, this is his first formal, legal suggestion that his agreement to buy Twitter is anything other than legally watertight.
Between the lines: The letter from Musk is ostensibly about a dispute over data. Musk wants Twitter to provide him with information that will help him “facilitate his evaluation of spam and fake accounts on the company’s platform.”
The big picture: Thanks to the recent rout in technology shares, both Twitter and Tesla, which is the main source of Musk’s wealth, are worth much less today than they were when Musk entered his initial bid of $54.20 per share. That means Musk is overpaying for the company, with money he is going to have difficulty finding.
The bottom line: There is zero chance that Twitter will simply accept Musk’s assertion that he has the right to withdraw from the agreement. If he tries to do so, things are likely to get messy.
The original terms of the deal specified that Musk could withdraw if, and this is a big if, he wanted to pay a penalty of One Billion Dollars. That is a hefty penalty, but that’s how the original paperwork read.
He has gone on about this spam and fake accounts nonsense for some time. Twitter has been forthcoming with all that data. There is not some massive percentage of bots on the platform, except in the fantasy world of right-wing media — and maybe that’s where Musk got the idea.
The initial reaction to this news is that Musk should just quit while he’s ahead and pay the billion dollars. If he keeps stalling and dragging this situation out, it’s only going to get more expensive. But maybe that’s a lesson the world’s richest man needs to learn.
Considering he’s killed the money part of it himself, with his babbling over the last month, I’m so not surprised.
I’m shocked I tell you, shocked….not. I just figure he thought if he bad-mouthed Twitter enough their share price would decrease (it did) and he would be able to get the shares at a lower price. Yes, I do think he is that stupid. Yet another whiny baby from a wealthy family thinking he can get his own way, always, if he whines and throws enough tantrums. My disgust for this putz is almost, but not quite, on par with my disgust for former guy.
usually what happens is that the sale price is set by the agreement. What he’s done is drop his own wealth (based on Tesla shares) so he now can’t afford the price he agreed to pay for Twitter.
I hope this happens. It’s a delight to hear this soulless vulture capitalist has to scramble for the money to pay this. $B fine is pretty steep. That could blow it.
He is legally required to stick to the original deal unless Twitter is willing to change it. However, it is highly unlikely that this would happen. He had better pay the $1 billion and drop the whole thing. If he drags it out any more, he is going to lose a lot more money than he already has. He should have given this idea a lot more thought before making the initial offer. Tough shit, Elon. Tough shit!!
“right not to consummate”
I always find his views come across as flaccid. That would hinder consummation.
Won’t any of the commenters here please consider poor, defenseless Donald Trump and his stolen Twitter account? ?