TheQuartering [7/21/2022]
As ruled by a Delaware judge on Tuesday, Twitter and Elon Musk will go to trial in October over the $44 billion acquisition deal. In case you have had the luxury of forgetting, Musk made an offer to buy Twitter earlier this year, and a lot of drama has followed since.
Tuesday’s ruling was the first decision in the lawsuit that Twitter filed about a month ago in an effort to force Musk to go through with the deal to buy the social media platform. The world’s richest man and Tesla CEO had agreed to buy Twitter in April but by July he said that he wanted to terminate the deal. If Musk does terminate the deal, he will have to pay a fine of $1 billion.
As the New York Times reports, Twitter sought to expedite the case and requested for a trial in September while Musk countered this by asking for a February trial. After an almost two-hour-long hearing, the judge overseeing the case in the Delaware Court of Chancery, Kathaleen St. J. McCormick, said that the longer the merger transaction remains in limbo, the “larger a cloud of uncertainty” would be cast over Twitter.
Twitter said that the longer the trial took the more time Musk would get to “badger” the company and find a way to get out of the deal. So, Tuesday’s ruling is a win for Twitter, of sorts. According to McCormick’s ruling, the October trial will last for five days and the exact date is going to be decided based on the court’s and the lawyers’ schedules.
Twitter obviously wants the lawsuit to be resolved as quickly as possible. As Twitter’s lawyer Bill Savitt said, this ongoing uncertainty is inflicting harm on Twitter “every hour of the day”. Musk’s lawyers have said that he needs more time to analyse “extraordinary amounts of data” to determine if Twitter’s count of 5 per cent of its users being bots is right or not.
When Musk put in the offer to buy Twitter, he said that the platform had a lot of potential and to optimise that he wanted to take it private. However, in a matter of weeks following his offer, he started attacking the platform and its top employees about the number of bots on Twitter and about how specific tweets were pulled down.
Musk also accused Twitter of blocking his attempts to understand exactly how many accounts on the platform were fake and claimed that relevant information was not being supplied to him. On its end, Twitter said that it has provided the information Musk has been requesting regarding the bots on the platform and has accused the SpaceX CEO of trying to find a way out of the deal following the stock market slump.
Earlier this month, Musk said that he wanted to terminate the Twitter deal due to three main reasons. First, he accused Twitter of breaching the agreement by failing to provide enough information on the bots; second, he accused Twitter of misrepresenting the number of bots in its disclosure; and third, Musk alleged another breach of agreement accusing Twitter of not consulting him before firing some senior employees.
Musk’s attorney Andrew Rossman has said that the accusation against Musk of trying to damage Twitter is “preposterous” because he is Twitter’s second-largest shareholder.