Twitter wins the first battle in its war with Elon Musk.
The company has made progress in its effort to ensure that Musk completes his purchase of the social-media platform. And while it’s a small and early legal victory, the judge’s comments in the ruling tilt the scales of justice toward Twitter.
In April, Elon Musk announced that he held a 9.2% stake in Twitter, which made him the social-media company’s largest shareholder. Twitter’s stock price soared 25 percent after the announcement.
Later that month, the billionaire entrepreneur offered to buy all of Twitter at $54.20 per share—equaling about $44 billion. He said he originally invested in the platform because he believes it is failing in its potential to be the leading platform for free speech around the globe. In fact, he asked his 2 million followers if Twitter adhered to principles of free speech, and 70 percent said “no.”
Then last week, Musk decided to back out of the deal, claiming there were too many fake accounts on the platform. Twitter has since sued Musk in Delaware Court of Chancery to complete the deal and requested the trial to take place in September. Musk, on the other hand, wanted to delay the trial until February 2023, stating that a case of this size takes time to prepare.
Today, Twitter was granted its wish of an expedited trial. Chancellor Kathaleen McCormick, the presiding judge, set a five-day trial for October. Although the chancellor did not agree to Twitter’s wants of a September trial, many are still considering this a win for the social-media company.
“Twitter had requested a September date—an effort to prevent Musk from causing further damage to the company through his firebrand Twitter account and his legal team’s plan to request reams of potentially damaging internal documents,” The Washington Post reported. Musk’s team countered, requesting February.
“Twitter’s sudden request for warp speed after two months of foot-dragging and obfuscation is its latest tactic to shroud the truth about spam accounts long enough to railroad defendants into closing,” replied a member of Musk’s legal team.
“Mr. Musk has made it very clear: He doesn’t intend to keep any of his promises,” replied lead Twitter lawyer Bill Savitt during the hearing.
As reported here yesterday, Judge McCormick has a history of enforcing existing contracts, and her latest Twitter/Musk ruling aligns with that point of view. This is her comment on Musk’s request for a delayed trial: “The reality is the delay threatens irreparable harm to the sellers and to Twitter. The longer the merger transaction remains in limbo, the larger a cloud of uncertainty is cast over the company.”