As Twitter took Elon Musk to court earlier in July for walking away from the purchase agreement, we had published a non-consensus call that the overarching goal of the CEO of Tesla was to reduce the purchase price of Twitter. Well, that view is now gaining broader acceptance. As a refresher, Twitter has now initiated legal proceedings against Elon Musk for abandoning the agreement to take the social media giant private in a $44 billion deal. Musk had cited Twitter’s failure to satisfactorily prove the fidelity of its Monthly Active Users (MAUs) metric as a major stumbling block to the consummation of the deal, repeatedly casting aspersions on Twitter’s claims that less than 5 percent of the active accounts on the platform could be defined as bots or fake accounts. Musk also took exception to Twitter’s recent decision to fire two key executives as well as lay off a third of its talent acquisition team. For its part, Twitter has continued to claim that the quantum of bots on the platform is not a material legal impediment to the consummation of the takeover deal, especially as Elon Musk had waived due diligence during the negotiations phase. The 5-day legal showdown between Elon Musk and Twitter is now expected to take place at the Delaware Court of Chancery in October, where the social media giant hopes to compel Musk to consummate his buyout agreement via a suit for specific performance. This brings us to the crux of the matter. We had noted earlier in July: Well, now Fox’s Charles Gasparino is out with a scoop. While quoting Elon Musk’s bankers, Gasparino tweeted that the CEO of Tesla’s “game plan is to force $TWTR to agree to terms below his initial $54.20” per share offer price:
— Charles Gasparino (@CGasparino) July 27, 2022 Elon Musk allegedly believes that Twitter would prefer to settle instead of enduring a drawn-out legal battle that will not only prove costly but also hammer the company’s stock price:
— Charles Gasparino (@CGasparino) July 27, 2022 In a new filing with the SEC, Twitter disclosed that Elon Musk’s acquisition agreement has already cost the company $33.1 million. This is before taking into account the mounting legal costs that Twitter is now likely to face as Musk plays every dirty trick in the book to force the social media giant on its knees.
