Elon Musk and the Twitter Saga
By: Xiu Sun
Elon Musk wanted to acquire Twitter this April. Now he is seeking to get out of the deal. In response, Twitter sued him to enforce his acquisition of the company.
Elon musk is the CEO of Tesla and SpaceX, and founder/cofounder of the Boring Company, Neuralink and OpenAI. Musk is the wealthiest man in the world, with an estimated net worth of US$221.4 billion, according to both the Bloomberg Billionaires Index and Forbes' real-time billionaires list.
Musk, a frequent twitter user with over 100 million followers, pledged to make Twitter a public town square with freedom of speech by disclosing its algorithms, building on new features, and defeating spam bots.
This January, Musk became the largest shareholder of Twitter, and in early April he dramatically declined the offer to join the board of Twitter at the last minute. A few days later, on April 14, he announced on Twitter that he made an offer to buy Twitter for $54.20 a share, the “best and final offer” in his own words.
Twitter has put on an aggressive fight initially to fend off Musk’s “hostile takeover”, by adopting a limited duration shareholder rights plan known as “poison pill”. It would make it difficult for Musk to increase his stake beyond 15%.
The “poison pill” did not hold for long under financial pressure of Musk. He got $46.5 billion in line, ready to buy Twitter. On April 25, Twitter accepted Musk’s bid to acquire the company at about $44 billion.
The ink of the deal wasn’t even dry when the argument regarding the percentage of fake accounts began. Twitter repeatedly claimed that the fake accounts represent less than 5% of its users. Musk disagreed with number and estimated that figure to be at least 20%.
In Musk’s recent letter withdrawing the deal, he accused that Twitter had made “false and misleading representations” when entering into the agreement. A week later, Twitter filed a lawsuit in Delaware Chancery Court, seeking to force him to honor the terms of the deal. The lawsuit is going to be a hard-fought legal battle between the two giants with an army of legal talents.
Twitter shares plummet as the messy legal battel continues. Twitter stock closed at $39.50 a share price, almost 30 percent below the $54.20, for which Musk signed the deal to buy in April .