The billionaire said after he announced he was giving up on trying to buy the social media company that Twitter will have to “disclose bot info in court.”
The number of bots on Twitter has been a topic of discussion between Mr. Musk and Twitter for some time. The number of spam accounts was mentioned by Mr. Musk in the first press release he issued about purchasing the business.
He has since claimed that Twitter’s statistics on bots are inaccurate. When CEO Parag Agrawal explained in a lengthy thread how Twitter estimates fake accounts, Elon Musk replied with the poop emoji.
Uncertainty surrounds Mr. Musk’s attempt to withdraw from the agreement. However, Twitter has made it clear that it is prepared to fight to have it passed.
Bret Taylor, the chairman of Twitter, tweeted, “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’re sure we’ll win in the Delaware Court of Chancery.
If the buyout is litigated, Mr. Musk may be required to cover significant costs.
One billion dollars was set aside as a forfeiture fee in the agreement Twitter and Mr. Musk signed. Nevertheless, as professor Scott Galloway stated on Pivot, “if I sign an airtight contract for me to buy your car, and you show up with the car, and I don’t show up with the money, and [you] can only get $10,000 for the car, and I agree to buy it for $25,000, I owe you $15,000.”
According to reports from last week, Mr. Musk had stopped “engaging in certain discussions” about the deal and had cut off contact with a significant investor.
In accordance with Mr. Galloway, Mr. Musk is now “on the hook” for the difference between the company’s market cap, the shares he already owns, and the price he agreed to pay for it. He added that since the case was going to court, it might be “one of the most watched legal cases.”
According to Bloomberg analyst Matt Levine, Mr. Musk has also made “increasingly baroque requests” to Twitter regarding its bot data. Twitter granted Mr. Musk access to real-time data, including API information, after he complained that the company was trying to “resist and thwart” his information rights. Mr. Levine writes, “It is difficult to imagine a judge sympathizing with Musk here.
In the past, Mr. Musk has made extravagant and expensive claims about his companies, most notably when he famously declared in a tweet that he would take Tesla private at $420 per share and that the “funding [was] secured.” Because of this false tweet, Mr. Musk and Tesla were each fined $20 million.
Mr. Musk’s strategy of using his corporate ventures carelessly within Twitter has had a significant impact. The Independent understands that Twitter revoked the employees’ access to online resources while they were in their redundancy meeting before firing 30% of its recruitment team, shocking employees.
Previously, the business fired Kayvon Beykpour and Bruce Falck in May, who were in charge of Consumer Product and Revenue, respectively. Mr. Musk hinted at layoffs during a meeting with Twitter employees by saying that the company’s “costs exceed the revenue.”
However, Mr. Musk’s attorneys are attempting to use this as an excuse for the businessman to back out of the agreement. They write that “Twitter’s conduct in terminating two key, high-ranking employees… implicates the ordinary course provision,” but Mr. Levine claims that it is “unlikely” that a court will side with Mr. Musk on this.
According to The Independent, morale is low at Twitter because workers think Elon Musk has affected layoffs and lowered the company’s share price. Employees who were fired quickly report feeling upset, and the sackings have strained relations among the remaining workers.