Tesla’s CEO, Elon Musk and Twitter have been at loggerheads over the failed plans to purchase Twitter. Elon Musk suddenly pulled out of the deal claiming that Twitter does not know the number of bot account the platform has. After the initial plan to buy Twitter hit the public, many could not see the reason why Musk will have an interest in Twitter. However, Elon Musk has finally revealed why he has an interest in Twitter. According to a series of Tweets by Elon Musk, claims that the acquisition of Twitter is a catalyst to accelerate the creation of a full-featured App – “X”.
Musk also adds that the acquisition of Twitter could bring Project X forward by three to five years. However, he also claims that this is only his projection and could be wrong. As of now, Elon Musk has not explicitly disclosed his plans for Twitter. However, the service could be appropriate for both corporate and government users.
In April this year, Musk proposed to acquire Twitter at a price of $54.20 per share. Musk once again agreed to buy Twitter for $54.20, according to the latest SEC filings. According to previous reports, Twitter issued a statement saying it had received a letter from Musk’s lawyer. It appears all the court proceedings could come to an end as early as Friday. Sources claim that both parties could reach a deal by Friday.
Elon Musk makes a U-Turn – agrees to buy Twitter
Over the past few weeks, there have been speculations and brouhaha between Twitter and Musk. However, in a sharp turn in events, Tesla CEO Elon Musk announced that he agreed to acquire Twitter. This means that he will spend the initial $44 billion on the acquisition of Twiter. However, why did his attitude suddenly reverse 180 degrees? This may be because multiple pretrial rulings have already portended it to lose the case.
On Tuesday, Musk announced his intention to continue with his original plan to buy Twitter for $54.2 a share. The timing of the news is clever, as Musk will go to court with Twitter in just a few days. He is accusing the social media platform’s executives of misleading him about the number of fake accounts. Musk’s latest decision may have been influenced by Delaware Chancery Justice Kathaleen St. J. McCormick’s six rulings over the past three months. All the rulings have hit Musk’s claims hard. This is thwarting Musk’s efforts to prove he had legitimate reasons to pull out of the deal.
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Brian Quinn, a Boston College law professor who specializes in merger disputes, said: “It’s clear from Judge McCormick’s decision that the judge focused only on the agreement signed by the parties, not on the horse. What Musk wants to talk about. Musk doesn’t seem to have any support from the judge regarding his issue of fake accounts on Twitter.”
Judge ruled in Musk’s favour on some issues
However, the judge did rule in Musk’s favour on some issues. One such issue is the use of Twitter whistleblower, Peiter Zatko’s allegations to back up against the acquisition. Zatko accused Twitter of being lax in ensuring computer security. He also claims that the company has a strong lack of interest in tackling fake accounts, among other things.
Zatko claims Twitter executives did not have the resources to fully understand the true number of bot accounts on the Twitter platform. Also, they have little incentive to know. As we all know, Twitter is currently involved in a legal dispute with Tesla CEO Elon Musk over the issue of bot accounts (spam accounts). Twitter said in regulatory filings that the number of bot accounts on its platform was less than 5 per cent of the total. However, Musk is sceptical, saying that Twitter could have as high as 20 per cent of fake users. A judge will hear the case on October 17 for five days.
Judge McCormick also sharply criticized Musk’s team for mishandling the pretrial exchanges. These exchanges of information are common in company lawsuits. In a September ruling, she found that Musk had failed to turn over communications records of himself and his top aide, Jared Birchall. The judge said Musk and his lawyers were “clearly flawed” in their hasty responses to Twitter’s request for records of related text messages and in meeting deadlines.
Here are the other rulings Musk lost:
1) A week after Twitter sued Musk in July, Judge McCormick rejected Musk’s request to postpone the trial until February next year and set the case to be heard on October 17. She also backed Twitter’s request to stick with the five-day trial.
2) In August, Judge McCormick ordered Musk to turn over information records of potential investors. As part of the deal, these individuals will participate in a $7 billion equity financing. Musk complained that Twitter had gone too far, arguing that Twitter had obtained enough data about investors. In addition, McCormick complied with Twitter’s request to have Musk hand over information on “people with knowledge of or involvement in key issues and events” in the deal, despite protests from Musk’s lawyers.
3) In late September, Judge McCormick rejected Musk’s request for more documents from Twitter about Twitter’s internal estimates of fake accounts. The judge had previously concluded that Twitter had disclosed enough information.
Just before the public learned of Musk’s decision to drop the lawsuit to reject the takeover, Judge McCormick allowed Twitter to continue to expand its search for evidence that Musk and his lawyers had previously had ties to Zatko. At the same time, she ordered Musk to expand its search for internal Twitter files, including texts, instant messages and encrypted emails.