Twitter is going to take legal action against Elon Musk through Musk deal
Social media platform Twitter is reportedly looking to file litigation against Telsa CEO Elon Musk after he announced his intent to 1 end the $44 billion deal to get the social media giant on July 8. It’s uncertain whether this potential litigation will ultimately see Musk purchasing the platform at the previously agreed price, at a new price, or not.
The company has hired the corporate law firm Wachtell, Lipton, Rosen & Katz as reported by Bloomberg reported on July 10, and will bring the case to the Delaware Court of Chancery, a non-jury trial court that deals with corporate law in the state of Delaware.
Twitter chairman Bret Taylor pledged to pursue legal action against Musk last week, for trying to pull out of the deal, claiming the board is “committed to closing the transaction” as formerly agreed and planned to pursue legal action “to enforce the merger agreement.”
Though, some believe that Musk’s move to terminate the deal is nothing but another tactic to renegotiate the terms of the pricey agreement.
Proving the speculation, Financial founder and CEO Julian Klymochko told his 24,200 Twitter followers on July 8 that a negotiated settlement will be the “most likely outcome.”
An analyst at CFRA Research Angelo Zino, made a similar prediction to non-profit media organization NPR on July 10 that there would be “no chance” for the deal to be put through at $54.20 per share as formerly agreed.
“You’re either going to see a 15 to 20% drop in the offer price to get Elon Musk engaged again, or he continues to play the bot card,” he added.
Musk has an avenue to pull out of the deal but will be hit with a $1 billion “termination fee” payable to Twitter, according to the initial Securities and Exchange Commission filing submitted on April 25.
Musk’s verdict to step away from owning Twitter has mainly been seen as negative by the platform’s crypto community, who supported his plans to eliminate all spam and scam bot accounts from the micro-blogging platform.
Others are optimistic that Musk could use the funds to instead “bail out the crypto industry instead” amid the long-running crypto winter.
A letter said Musk is terminating the merger because Twitter “appears to have made false and misleading representations,” arguing that Twitter was not clear about its process for auditing spam and fake accounts and identifying and suspending such accounts reached the Twitter board on Friday.
