Twitter Successfully Fast-Tracks Musk Trial, Now Set for October
The internet drama between Elon Musk and Twitter has been building for months, and you’re probably wondering when we’ll reach a resolution. Now we know: October 2022. A Delaware judge has sided with Twitter in its request for an expedited trial. At issue is whether Musk will be forced to abide by the terms of his $44 billion takeover offer, which he announced he was abandoning a few weeks back.
Musk’s aborted quest to acquire the social media platform began secretly early this year when the world’s richest man scooped up about nine percent of Twitter’s stock. He then refused to join the board, which would have prevented him from attempting a hostile takeover. By April 2022, Musk had offered to buy the company outright and take it private, something he clearly wanted to do with Tesla. Although, regulators gave him a slap on the wrist for implying that deal was done when it wasn’t even on track to happen. Now that the deal is falling apart, reports Law and Crime, Twitter wants Musk to abide by the deal, and Musk accuses Twitter of scuttling the deal with inaccurate data.
It didn’t take long after the offer for Musk to start getting cold feet. He complained extensively about Twitter’s moderation policies, both in written word and meme formats. The real target of Musk’s ire was the company’s bot count. In previous regulatory disclosures, Twitter said it believed bots made up about five percent of accounts. Musk claimed that number was higher and demanded access to internal data to find out the truth. Twitter provided that, but Musk announced he was backing out of the deal earlier this month.
The thing is, he signed a contract. There is a $1 billion breakup fee, but Musk can’t unilaterally exercise that clause. Twitter’s position is that he should be forced to abide by the terms of the contract, which means forking over $44 billion. Musk was planning to use a combination of cash, partnerships, and loans leveraging his Tesla stock to fund the deal. As Tesla’s value dropped this spring, the financial impact on Musk was amplified. This might have had something to do with his change in tone, going from “it’s time to fix Twitter,” to “Twitter is lying to us.”
Musk’s attorneys wanted to set the trial for February 2023, but Twitter successfully persuaded the court to schedule the case over five days in October 2022. It originally sought a September date, but this is still an early win for Twitter. It’s possible Musk could be forced to continue with the buyout by the end of 2022, something he very much does not want to do anymore. Twitter could also leverage a court victory to negotiate a more favorable breakup deal, remaining independent but also walking away with more of Musk’s cash.
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