Elon Musk may be the richest man on the planet. But that doesn’t mean he can back out of buying Twitter without consequences. Minutes after its decision to abandon the social network purchase deal was made public, the company responded by assuring that it will sue Musk seeking to make him fulfill his part of the agreement.
“Twitter’s Board is committed to closing the transaction at the price and terms agreed with Mr. Musk and plans to take legal action to enforce the merger agreement,” he posted on social media (less than an hour after the news broke). ) Bret Taylor, president of the social network.
The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.
— Bret Taylor (@btaylor) July 8, 2022
Musk’s reason may not work in court
For weeks it seemed that the agreement to buy Twitter had no future. The real suspicions began when Musk demanded that the social network share the user information and the updated numbers of false accounts and bots.
The problem is that the initial agreement for 41 billion dollars at no time had a number of spam accounts as a condition. At that time Musk opted for another strategy: he assured that the information presented by Twitter was not correct, which is why the purchase should be paused. Twitter responded by giving it access to its information ‘hose’: a data source that contains the information of the more than 500 million tweets that are sent daily through the social network.
Twitter has the upper hand, because the reason for the purchase is different
Of course, the problem isn’t spam accounts: Musk simply doesn’t have the money to make the purchase.
The billionaire has had trouble securing the funds needed to complete the deal. Not only this, but when it was suggested that he could put other of his companies as backing to get this money, Tesla shares suffered worrying drops.
This is where Musk’s request for the number of Spam accounts comes from. At the time, Twitter and Musk signed a termination clause: if Musk did not have the funds for the purchase, he had to pay a billion dollars. On the contrary, the termination clause does not mention anything about the non-delivery of data or spam accounts, but it is activated if the shareholders’ meeting voted on the purchase.
This means that, unlike Musk’s lawyers, Twitter has all the material to prove that it was Musk who violated the purchase agreement because (and again, this is important) he doesn’t have the funds to complete the acquisition, which is easy to do. try and that it has precedent over Musk’s request for spam accounts.