August 11, 2022

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Elon Musk and Twitter, what could happen now?

A legal battle will begin that could also turn out very badly for Tesla Number 1 and Space X. There are three hypotheses in this area. In addition to an unprecedented fourth scenario

As a novel addition: Elon Musk’s Twitter acquisition story, whispered first, then announced question Finally to retreatShe has a lot to say. And maybe more twists around the corner.
There are two types of certainty. One: It will start long and full of blood legal battle, due to Musk relinquishing a majority stake in the social network. Second: The value of Twitter’s stock, which has already fallen about 5% in after-hours trading on Friday, is expected to fall further, and possibly collapse.

Musk, also has personal problems (it was just revealed He had twins with an employee), last April to buy Twitter for $44 billion. that by saying $54.20 per share. Friday’s blue bird bids on Wall Street were high $36.81 USD, 5.10% lower than on Thursday. Hours later, they lost another 4.81% to $35.04 per share. According to all experts, this is the real reason for the shift of the beneficiary of Tesla and Space X. Even if Musk finds the necessary funds, the agreement is no longer economically viable after months of significant price drops for the company.technology. Tesla itself, which in April hit $1,140 (and in December over $1,200) is now priced at $750. Officially, the South African billionaire catalyzed the transformation by sticking to the topic of fake accounts: Twitter wasn’t honest, without revealing the true number of “non-human” subscribers. From a legal standpoint, the suspension may be fragile for Mask. Certainly, Twitter’s board of directors has no intention of drafting and accepting a breach of the agreement.

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in Delaware

Twitter CEO Brett Taylor He announced (by clearly tweeting) that the company remains committed to closing the deal at the agreed-upon price and plans to take legal action to enforce the deal. “We are confident we will prevail in the Delaware courts,” Taylor wrote.
If the case passes into the hands of lawyers, as is almost certain, the trial will likely take place in Delaware, the US state in which Twitter is registered (Delaware offers companies a very favorable tax system). There is already a potential judge: Kathleen St. J. McCormick, identified by the US media as she is already dealing with the issue of the Orlando Police Pension Fund Apply for the deal Twitter catch.

The three hypotheses

There are three basic assumptions about how it will turn out.
1) Elon Musk pay the fine It agreed in April in the event of a withdrawal of the equivalent of 1 billion dollars and the exit of the agreement. While the $1 billion fine might seem like a huge amount to us mere mortals, it would be a plus for Musk, given how things have unfolded and how much of the stock has gone down in value in the meantime.
2) judge Musk could be forced to buy Twitter at the agreed price. And in the end it can also add a fine. Paragraph 9.9 of the Musk-Twitter Merger Agreement states that the company “shall be entitled to specified benefits or other equitable compensation to enforce the obligations [di Musk]United States administrative law experts cite the precedent of IBP Inc. v. Tyson Foods Inc., with Don Tyson of Tyson Foods playing Elon Musk. Tyson attempted to pull out of the IBP’s coordinated takeover, but in 2001 was forced to buy out the company. Anyway from Delaware court.
3) A Out of court settlementwith Musk paying a large sum (more than a billion fines) to Twitter and avoiding the risk of forcing a judge to buy the social network.
there Fourth chanceKnowing Musk: What if a judge forces Musk to buy Twitter and the billionaire simply refuses to do so? There are not many precedents.

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Twitter and the stock market

While legal matters can go wrong for Musk, on the financial front Twitter is set to take the worst hits.
The company is now in a very bad situation. Analyst Dan Ives, citing NBC NewsFears the stock could crash further on Monday: “This Monday is a $25 share. The company is in absolute chaos: employees are leaving in droves and competitors are getting their hands on advertising revenue. With a high employee turnover rate, another potential buyer will view Twitter as a “bad commodity.”

Jul 09

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