The battle between Elon Musk and Twitter continues, as the social-media company denies the entrepreneur’s effort to walk away from acquisition.
Key Details
- The back and forth battle between the Tesla founder and Twitter continues on with another letter from Elon Musk.
- Last week, Elon Musk’s legal team sent a letter to Twitter detailing another reason why Musk should be able to terminate his $44-billion deal to buy Twitter.
- The letter alleged that Twitter broke the terms of the deal by paying whistleblower Peiter Zatko millions in hush money. The social-media company pushed back saying the payment did not breach any of its obligations under the contract.
- Twitter said it plans to enforce the agreement and close the transaction on the price and terms agreed upon with Musk, according to a Securities and Exchange Commission filing.
- Twitter shareholders will vote Tuesday on whether to approve or reject Musk’s takeover bid.
Why it’s important
Elon Musk has attempted to back out of his $44-billion deal to buy Twitter due to the platform having too many fake accounts and the company giving misleading data about itself for months.
The news of Twitter paying millions to hush someone basically agreeing with Musk’s claims is a big deal. During a hearing last week, Chancery Judge Kathaleen St. Jude approved Musk’s requests to add Zatko’s allegations to his counterclaims.
During the hearing, Twitter lawyers tried to undermine the whistleblower complaints, saying Zatko was trying to harm Twitter for firing him. Musk argued that Zatko began to raise concerns over the privacy and security of the social media company before he was terminated.
Twitter paying hush money to a former exec looks good for Musk, but if the claims aren’t able to be used in court then the case looks as if it could go either way.
Zatko is set to testify before a Senate committee soon and has been subpoenaed to testify in the Twitter lawsuit.
Backing up a bit
The timeline between Elon Musk and Twitter is a lengthy one.
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% 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% said “no.”
Last month, 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. Twitter was granted its wish of an expedited trial, with Chancellor Kathaleen McCormick, the presiding judge, setting a five-day trial for October.
Musk then countersued Twitter, stating his reason for the termination was due to Twitter not being upfront about the number of fake accounts on the platform.
Then, Elon Musk and his legal team subpoenaed Twitter’s founder and former CEO Jack Dorsey, to get him to release documents that provide accurate information on bots and spam accounts on the social-media platform and now these documents have come out from Zatko and Musk and his lawyers have subpoenaed him as well.
The trial is set for October, unless it can be settled before that date approaches.