Twitter, which the world’s richest man wanted to buy and then pulled out of the deal, is facing a legal battle in which its board of directors stands a good chance of winning, but the group won’t leave it unscathed.
“It’s one of the craziest economic problems I’ve ever seen,” analyst Dan Ives told AFP. “It looks like a circus from the start and ends the same way.”
On Friday, Elon Musk tweeted that he had terminated an agreement he made in April to buy the platform for $54.20 a share, or a total of $44 billion.
But Tulane University law professor Ann Lipton says this type of contract “is designed to ensure buyers don’t panic and back out of the deal.”
The head of Tesla and SpaceX makes arguments including that the board underestimated the number of active non-original accounts on the platform and did not provide it with all the information it needed to properly assess the spam problem.
Musk’s lawyers also speak of Twitter’s recent employee layoffs and hiring suspension, which runs counter to the group’s commitment to continue operating normally.
But an expert in the law of commercial disputes believes that these reasons are not enough, and said that “Musk is looking for weaknesses in the contract, and for “false” announcements, for example, it is not enough to prove that they are false. only, but that they strongly question the economic foundations of society.
“From a legal point of view, it seems clear that Musk is wrong,” she added.
The possibility remains that Musk is actually trying to renegotiate the terms of the price cut, as he successfully used this tactic with LVMH. Two years ago, the luxury goods group entered into an acquisition deal with Tiffany and then secured a price cut.
In the worst case scenario, he may have to honor the deal and buy the California group at the price that was quoted first, which is very high compared to its current value, while his fortune has decreased by tens of billions in recent months.
If Twitter wins in the courts, the businessman will have to pay several billion in damages, but this shareholder victory will leave the group and the social network in the hands of Elon Musk.
Source: AFP.