Now it’s Twitter’s turn to mess with Elon Musk. After the Tesla boss ditched his $44 billion buyout of the social network, Twitter hired a law firm to plan a lawsuit to enforce the merger agreement. The legal ammunition could be messy, says GinaChon.
. The social media company has now hired Wachtell, Lipton, Rosen & Katz to plan a lawsuit to enforce the merger agreement. The legal ammunition, which includes former Delaware Chief Justice Leo Strine, could be messy. But the messier it gets for both Musk and Twitter, the more likely it is they’ll settle on their own before the court decides.
The deal constructed quickly in April includes a mediocre $1 billion fee that would be paid by Musk if he walks away, assuming certain criteria are met. For weeks he has been griping about fake accounts on the platform, and on Friday he cited that as a reason for walking away. The company is fighting back. Twitter board chair Bret Taylor said directors are committed to closing the deal and will pursue legal action.
It could be ugly for both sides, at least in the near term. If Musk stays true to form, he’ll continue to work to undermine Twitter’s business model and perhaps even some of its board members. The social network’s market value went up as high as $40 billion under his halo, but it has fallen to about $26 billion, about $4 billion shy of where it was before Musk disclosed his 9% stake in April. The more he makes their lives miserable, the more likely they are to settle outside of court.
The more painful the legal proceedings become, the more motivated he might be to get Twitter off his neck. Plus Musk’s financing may be getting shaky, and Twitter shareholders could use some certainty, like a massive fee for him to back out. Closing this chapter would help put the company in a spot where it can try to turn around on its own or better position it for another, more committed buyer
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