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Elon Musk’s monthslong tussle with Twitter took another twist Tuesday when the Tesla billionaire seemed to return to where he started in April — offering to buy the company for $44 billion.But it’s not over yet. Twitter says it intends to close the deal at the agreed-upon price, but the two sides are still booked for an Oct. 17 trial in Delaware over Musk’s earlier attempts to terminate the deal.Does Elon Musk own Twitter yet? No, he doesn’t own Twitter and it’s still not clear if or when he would take it over. What happened this week is that his lawyer sent a letter to Twitter saying Musk will complete the deal as long as he lines up the promised debt financing and provided that the Delaware Chancery Court drops Twitter’s lawsuit against him. But Twitter is unlikely to give up on its legal proceedings unless it confirms that the deal is for real this time and not a tactical gambit.What was Musk’s main argument for backing out of buying Twitter? Musk grounded his argument largely on the allegation that Twitter vastly misrepresented how it measures the magnitude of “spam bot” accounts that are useless to advertisers.But Chancellor Kathaleen St. Jude McCormick, the court’s head judge, apparently wasn’t buying it. As the two sides presented evidence prior to the trial, the judge appeared to focus narrowly in line with the court’s mandate: on the merger agreement between Musk and Twitter, and whether anything had changed since it was signed in April that would justify terminating the deal.A former Twitter head of security, fired early this year and turned whistleblower, appeared to bolster Musk’s argument. Peiter “Mudge” Zatko, a respected cybersecurity expert, filed complaints in July with federal regulators and the Justice Department alleging that Twitter misled regulators about its efforts to control millions of spam accounts as well as its cyber defenses.But help to Musk from Zatko’s disclosures was a “longshot,” said Brian Quinn, a professor at Boston College Law School, and in the end, “it didn’t really change the (legal) landscape in any significant way.”Did Musk’s approach to buying Twitter hurt or help his case? “He was fairly cavalier,” Quinn said. Recently released text messages between Musk and others show jubilation over Musk taking a large stake in Twitter and joining its board. It wasn’t until after he signed the merger agreement in late April that he undertook what’s called due diligence, close inspection, regarding the company and started lodging complaints about bots, Quinn noted. That may not have impressed the judge as the right approach for someone buying a major company.Why did Musk change his mind now? In addition to the trial looming and his deposition scheduled for Thursday, Musk faced a ticking meter of potential rising interest costs. If he lost the trial, the judge could not only force him to close the deal but also could impose interest payments that would have increased its cost. Experts say the interest likely started piling up mid-September.But of course the deal isn’t done yet, and there are legal hoops yet to be jumped through.What happens next? The judge presiding over the Delaware case hasn’t yet publicly weighed in on Musk’s new proposal, but what she says could determine the next steps.Twitter’s deposition of Musk — set to begin Thursday — and even the Oct. 17 trial itself could still go forward if Twitter isn’t assured that the deal is closing, said Ann Lipton, an associate law professor at Tulane University.“Twitter is not going to let that proceeding stop until it gets that 100% reassurance,” she said.But if the deal does go through, Lipton said Musk could be in charge of Twitter in a matter of days — however long it takes him and his co-investors to line up the cash.
Elon Musk’s monthslong tussle with Twitter took another twist Tuesday when the Tesla billionaire seemed to return to where he started in April — offering to buy the company for $44 billion.
But it’s not over yet. Twitter says it intends to close the deal at the agreed-upon price, but the two sides are still booked for an Oct. 17 trial in Delaware over Musk’s earlier attempts to terminate the deal.
Does Elon Musk own Twitter yet?
No, he doesn’t own Twitter and it’s still not clear if or when he would take it over. What happened this week is that his lawyer sent a letter to Twitter saying Musk will complete the deal as long as he lines up the promised debt financing and provided that the Delaware Chancery Court drops Twitter’s lawsuit against him. But Twitter is unlikely to give up on its legal proceedings unless it confirms that the deal is for real this time and not a tactical gambit.
What was Musk’s main argument for backing out of buying Twitter?
Musk grounded his argument largely on the allegation that Twitter vastly misrepresented how it measures the magnitude of “spam bot” accounts that are useless to advertisers.
But Chancellor Kathaleen St. Jude McCormick, the court’s head judge, apparently wasn’t buying it. As the two sides presented evidence prior to the trial, the judge appeared to focus narrowly in line with the court’s mandate: on the merger agreement between Musk and Twitter, and whether anything had changed since it was signed in April that would justify terminating the deal.
A former Twitter head of security, fired early this year and turned whistleblower, appeared to bolster Musk’s argument. Peiter “Mudge” Zatko, a respected cybersecurity expert, filed complaints in July with federal regulators and the Justice Department alleging that Twitter misled regulators about its efforts to control millions of spam accounts as well as its cyber defenses.
But help to Musk from Zatko’s disclosures was a “longshot,” said Brian Quinn, a professor at Boston College Law School, and in the end, “it didn’t really change the (legal) landscape in any significant way.”
Did Musk’s approach to buying Twitter hurt or help his case?
“He was fairly cavalier,” Quinn said. Recently released text messages between Musk and others show jubilation over Musk taking a large stake in Twitter and joining its board. It wasn’t until after he signed the merger agreement in late April that he undertook what’s called due diligence, close inspection, regarding the company and started lodging complaints about bots, Quinn noted. That may not have impressed the judge as the right approach for someone buying a major company.
Why did Musk change his mind now?
In addition to the trial looming and his deposition scheduled for Thursday, Musk faced a ticking meter of potential rising interest costs. If he lost the trial, the judge could not only force him to close the deal but also could impose interest payments that would have increased its cost. Experts say the interest likely started piling up mid-September.
But of course the deal isn’t done yet, and there are legal hoops yet to be jumped through.
What happens next?
The judge presiding over the Delaware case hasn’t yet publicly weighed in on Musk’s new proposal, but what she says could determine the next steps.
Twitter’s deposition of Musk — set to begin Thursday — and even the Oct. 17 trial itself could still go forward if Twitter isn’t assured that the deal is closing, said Ann Lipton, an associate law professor at Tulane University.
“Twitter is not going to let that proceeding stop until it gets that 100% reassurance,” she said.
But if the deal does go through, Lipton said Musk could be in charge of Twitter in a matter of days — however long it takes him and his co-investors to line up the cash.
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