According to the Wall Street Journal (WSJ), the lawsuit between Elon Musk and Twitter may be the strangest trial in the history of American corporate mergers.
The arrogant Twitter `girl` at first did not want to fall into the hands of the rich `guy` Elon Musk.
Then when Twitter’s stock price evaporated 32% from 54.2 USD/share to 36 USD/share, Elon Musk began to want to get out of this supposedly `bad buy`.
Elon Musk’s side accused Twitter of falsifying data, posting false information, and making operational moves without the billionaire’s consent such as freezing recruitment or laying off employees.
The WSJ said that many legal experts believe that Elon Musk’s argument is not strong enough compared to Twitter because the reasons the Tesla founder gave did not explain the damages that caused him to abandon the deal.
Layoffs or temporary hiring freezes don’t actually happen at every Twitter.
The irony here is that even if they win the lawsuit, Twitter cannot force Elon Musk to continue the deal because there is no law that imprisons the buyer because they do not want to spend money on something, if only the buyer would.
The WSJ said there have been small deals where the court required the buyer to fulfill their obligations based on the specific terms they signed.
Historically, there has been a similar situation when the Tiffany brand sued fashion group LVMH in 2020 for abandoning deposits.
In Elon Musk’s case, the contract clearly states that the Tesla founder will have to pay 1 billion USD if the deal fails, a number that is too small compared to his 220 billion USD assets.
Game of catch
At the end of January 2022, Elon Musk bought 22.8 million shares of Twitter and continued to buy in February-March 2022, thereby owning 9% of shares, equivalent to 2.6 billion USD, becoming
It is worth mentioning that the founder of Tesla has boasted about owning Twitter with comments on whether to buy or build a new rival social network.
Initially, Elon Musk was said to want to sit on the board of directors, but on April 9, 2022, just a few hours before Twitter agreed, the Tesla founder decided to withdraw.
Billionaire Elon Musk’s arrogant attitude made Twitter’s board of directors hot-faced and they also ignored the proposal of the founder of Tesla.
Twitter’s nod sparked a media frenzy as the world’s richest man turned his attention to the social media business.
However, the story did not end as the stock prices of both Twitter and Tesla went down due to bad developments in the macroeconomic market.
Please be reminded that most of Elon Musk’s $44 billion is from selling or mortgaging Tesla shares.
Up to now, Tesla’s stock price has evaporated 37% and this means Elon Musk will have to mortgage even more shares if he wants to raise enough money to buy Twitter.