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CBC News | Jul 11, 2022
Shares of Twitter slid more than 9 per cent in the first day of trading after billionaire Elon Musk said that he was abandoning his $44 billion bid for the company and the social media platform vowed to challenge Musk in court to uphold the agreement.
Twitter is now preparing to sue Musk in Delaware where the company is incorporated. While the outcome is uncertain, both sides are preparing for a long court battle.
Musk agreed to a $1 billion breakup fee as part of the buyout agreement, although it appears Twitter CEO Parag Agrawal and the company are settling in for a legal fight to force the sale.
See: Musk Reacts To Snoop Dogg’s Interest to Buy Twitter
Musk alleged Friday that Twitter has failed to provide enough information about the number of fake accounts on its service. However, Twitter said last month that it was making available to Musk a ” fire hose ” of raw data on hundreds of millions of daily tweets when he raised the issue again after announcing that he would buy the social media platform.
Twitter has said for years in regulatory filings that it believes about 5 per cent of the accounts on the platform are fake. But on Monday Musk continued to taunt the company, using Twitter, over what he has described as a lack of data. In addition, Musk is also alleging that Twitter broke the acquisition agreement when it fired two top managers and laid off a third of its talent-acquisition team.
The sell-off in Twitter shares pushed the share price below $34, far from the $54.20 that Musk agreed to pay for the company. That suggests Wall Street has very serious doubts that the deal will go forward.
See: Elon Musk Asks McDonald’s to Accept Dogecoin
“With Musk officially walking away from the deal, we think business prospects and stock valuation are in a precarious situation,” wrote CFRA Analyst Angelo Zino. “(Twitter) will now need to go at it as a standalone company and contend with an uncertain advertising market, a damaged employee base, and concerns about the status of fake accounts/strategic direction.”
Continue to the full article –> here
The Guardian | Dan Milmo | Jul 10, 2022
Legal experts say Elon may have to follow through on the $44bn Twitter takeover
Elon Musk could be forced by a US court to complete his $44bn takeover of Twitter, according to legal experts, despite pulling the plug on the transaction. The Tesla chief executive told Twitter on Friday that he is terminating the deal, citing concerns over the number of spam accounts on the social media platform.
- Twitter’s chairman, Bret Taylor, responded with a tweet stating that the company intended to “pursue legal action to enforce the merger agreement”. On Sunday night, Bloomberg reported that Twitter had assembled a legal team to sue Musk.
- “They will likely be asking for a declaratory judgment that they are not in violation of the contract. Also, they will ask for an order from the court that Musk specifically perform his obligations under the agreement,” said Brian Quinn, an associate professor at Boston College law school.
- Under the terms of the agreement the company can ask a judge for “specific performance”, which would compel Musk to buy the company for the $54.20 a share he agreed to in April. Alternatively, the company can also seek a $1bn break fee from Musk for walking away from the deal in contravention of the agreement.
See: Musk’s Twitter acquisition: Reactions and what you need to know
Quinn said Musk’s arguments would probably fail in court.
- In Friday’s letter, Musk put forward three broad arguments: that Twitter had breached the agreement by failing to provide enough information on spam accounts; that Twitter has misrepresented the number of spam accounts in its disclosures to the US financial watchdog; and that the company breached the agreement by failing to consult with Musk when firing senior employees recently.
- Quinn said Musk’s information requests on spam accounts were not “reasonable” and would not be accepted by the court. “He can’t use unreasonable information requests to create a pretext to claim a violation,” he said.
Columbia University’s Coffee said: “Musk is on very weak legal grounds.
Continue to the full article –> here
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