- The Twitter sale to Elon Musk is capped at $44 billion.
- Musk announced his intention to pull out of the Twitter buyout deal through a letter on July 8.
- The Musk-Twitter battle seems to be a game of numbers, or is it?
Twitter seeks to file a lawsuit as early as this week against tech billionaire and Tesla CEO Elon Musk.
The move comes after Musk announced his intention to pull out of the Twitter buyout deal. The announcement came through a letter on July 8.
Twitter is reported to have set up a council of lawyers composed of Lipton, Wachtell, Rosen and Katz. The Twitter sale to Elon Musk is capped at $44 billion.
Legal Council involvement
The Corporate law firm council will bring the case to the Delaware Court of Chancery. The Court of Chancery is a non-jury trial court that deals with corporate law in the state of Delaware. The unprecedented move stirs moments of uncertainty about whether the deal will go through at all.
Last week, Bret Taylor, the Twitter Chairman pledged to pursue legal action against Elon Musk for trying to pull out of the deal as previously agreed. Taylor insisted that the company was ready to pursue legal action to enforce the merger agreement.
The Chairman stated that the board is committed to finalizing the deal as previously agreed. However, some believe that Musk’s move to pull out of this deal is just another tactic to renegotiate the terms of the agreement.
According to Julian Klymochko, the CEO of Accelerate Financial, the Twitter deal was going to be sealed. The CEO said that this move will take a while to play out but a negotiated settlement was the likely outcome.
Angelino Zino, a CFRA Research analyst made a similar prediction to a nonprofit media organization, NPR. On July 10, the analyst predicted that there would be no chance for the deal to pull through at $54.20 per share as previously agreed.
World’s view on Musk’s pull out
Angelino said that Musk would continue to play the bot card until there is a 15 to 20% drop in the price offered. In April, Musk struck the deal to buy Twitter for $54.20 per share. However, the company’s share price has fallen 32.1% since then.
The market share price of Twitter now stands at $36.81 per share. According to the initial Securities and Exchange Commission filings submitted on April 25, Musk has an avenue to pull out of the deal.
The filings also indicate that Musk will be liable for a $1 billion termination fee payable to Twitter if he pulls out of the deal.
Crypto Twitter disappointment
The crypto world which supported Musk’s plans to remove all spam and scam bot accounts on Twitter is disappointed by the move.
A poll by OKX, a crypto trading platform on July 8, found that 38.8% of respondents claim that the retreat will be bad for crypto Twitter. The respondents claim that the increase of spam bots is a crucial issue that will continue to haunt the crypto world if Musk pulls out.
About 40% of the respondents claimed that the move would not affect them in any way. Others hope that Musk will use the funds to bail out the crypto industry. Elon Musk issued a letter to the Twitter board on July 8 seeking to terminate the deal.
In a contrasting move, Musk, on July 11, shared a meme image of himself suggesting that the move will force Twitter to share data on bot activity.
