Elon Musk and Twitter – a love affair that caught all the attention of the public. First, he prioritised twitter deal over Tesla and ended up realising that he overvalued Twitter. He invested in Twitter only to gain power, but was later outfoxed by Twitter. Later, the twitter deal was put on hold and the speculations that Elon Musk will walk out of the deal set the market abuzz.
TFI had predicted that Elon Musk will back out from the twitter deal and turning our prediction into a truth, Musk has now stepped in with the decision to “pull the plug” on Twitter.
Elon Musk dumps Twitter deal
Elon Musk is in the news again. Billionaire Tesla CEO is now stirring controversy for his announcement that he seeks to pull out of the Twitter deal. Elon Musk, on July 9, reportedly said that he was pulling out of the $44-billion Twitter deal.
The decision came three months after he signed an agreement to buy 9.2 per cent stake of the micro-blogging platform privately. In his filing to the US Securities and Exchange Commission, Musk stated that Twitter did not inform him about fake accounts on the platform. He added that the company was breaching “multiple provisions of the agreement”.
Twitter, however, has come out saying that it will sue Elon Musk for abandoning the Twitter deal.
“The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr Musk and plans to pursue legal action to enforce the merger agreement,” Bret Taylor tweeted. “We are confident we will prevail.”
The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.
— Bret Taylor (@btaylor) July 8, 2022
It is pertinent to note that Tesla and SpaceX boss Elon Musk will have to pay a $1 billion breakup fee if he does not complete the transaction.
A timeline of Musk-Twitter saga
On 4th of April, Elon Musk, after buying the largest shares of Twitter, had become a board member of the company. A day later, Twitter CEO Parag Agrawal announced that Elon Musk will be a part of Twitter’s board. However, Musk rejected the offer to join its board and said that he would instead make the company private.
On 10th of April, the CEO of Twitter took to the micro-blogging site to announce that “Elon’s appointment to the board was to become officially effective 4/9, but Elon shared that same morning that he will no longer be joining the board.”
Read more: What’s cooking between Musk and Twitter?
If a person joins Twitter Board, then he won’t be able to become the sole owner of the company, as any member on the Board of company can buy only 15 per cent of the shares.
He was then sued by former Twitter shareholders, who claim they missed out on the recent surge in Twitter’s stock price, because the billionaire Musk delayed disclosing the fact that he had purchased a 9.2 per cent stake in the micro-blogging platform.
Elon Musk had then offered to buy Twitter for $54 per share. Apparently, it would cost Elon Musk $43 billion to buy 100 per cent shares. Musk later announced that he had secured $46.5 billion in financing for his Twitter bid.
Twitter’s board accepted his offer to buy the 100 per cent shares at $44 billion. Then came a shocking move by Elon Musk, as he posted a tweet declaring that he had unilaterally decided to put the Twitter deal on hold. When asked about his due diligence before the deal, Musk said that he had relied on the accuracy of previous filings by Twitter.
Twitter shares at that time were trading at $ 40.72, a remarkably smaller number than when Musk decided to buy it. During Musk’s offer, Twitter’s per-share price was hovering over $45. Since the price witnessed decline, Musk might have thought that he overvalued Twitter. Elon had offered to buy Twitter shares at $ 54.20 per share.
On June 6, Musk alleged that Twitter was “actively resisting and thwarting” his rights to information over bot accounts. Elon Musk had also threatens to walk away from twitter deal
A day before Musk’s announcement to pull the plug on Twitter, the micro-blogging platform had laid off 30 per cent of its talent acquisition arm.
Now that Elon Musk has left the Twitter deal, it would be interesting to watch what transpires next.
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