The dispute between Elon Musk and the administration of Twitter will continue in the courts, after the businessman having canceled the purchase operation of the social network, with analysts giving the company an advantage in the “wrestling match”.
According to experts consulted by specialized publications and cited by EFE, the Board of Directors of Twitter will have the upper hand in the legal battle to get Musk to complete the acquisition on the terms that had been proposed. The dispute will be decided in a Delaware state court specializing in commercial disputes, with the company wanting to enforce the agreement between the two parties or seek financial compensation.
The company's shares have devalued in recent months, with shares currently below 37 dollars, that is, below the proposal of 54,20 dollars per share presented by the businessman in April and which represented a deal of around 44 billion dollars.
Elon Musk argues that Twitter provided information "false and misleading” during the negotiations and failed to provide him with data he considers essential to complete the transaction. At issue will be, above all, the number of fake accounts on the social network (associated with “bots”), which Twitter claims to represent less than 5% of the total, but about which the richest man in the world has already expressed many doubts.
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For many analysts, the issue of “bots” was a pretext for the entrepreneur to withdraw from a business on which he could pay much more than the current real value of the company. This scenario is also associated with the impact on the shares of Tesla, Musk's largest company, and on his own personal fortune.
However, the businessman did not include too many conditions in the purchase transaction, so it seems unlikely that a court will accept his reasons for withdrawing. According to experts, Elon Musk's trump card is being able to prove that Twitter provided information about his business that does not correspond to reality, which can prove to be extremely difficult.
There is not much precedent in the US for similar cases, especially in deals of this size, but in most of these cases the buyer has been forced to move forward with the lawsuit. However, concluding the deal is also complicated and disagreements could further weaken the value of the social network.
Therefore, analysts consider that the most likely scenario is an agreement between the parties, allowing Elon Musk to withdraw from the purchase through compensation or a reduction in the price to be paid for the shares to close the acquisition operation.
Musk warned about a month ago that he reserved the “right not to consummate the transaction”, according to a letter addressed to the legal responsible for Twitter and published on the website of the regulatory authority for US financial markets, due to lack of information. about fake accounts on the social network.
According to the document released in May, Elon Musk intended to pay more than half of the $44.000 billion he is offering for the purchase of Twitter with equity and was negotiating the participation of the founder of the social network in the transaction.
According to a document submitted to the North American market regulator (SEC), the founder of Tesla and SpaceX initially said that he would contribute with 21.000 million dollars in his own funds, from his own pocket or supported by third parties.
Subsequently, shareholders of the technology company filed a complaint against Elon Musk, who they accuse of market manipulation to achieve savings in their operation to acquire this social media company.
