Weekends are typically a slow time for breaking business news.
That wasn’t the case beginning Friday night as Twitter put Delaware’s Chancery Court at the center of Elon Musk’s decision to abandon a $43 billion deal to buy Twitter.
The opening salvo was fired by Twitter Chair Bret Taylor, who put Delaware’s business court at center stage.
“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.”
Musk remained silent, but naturally enough posted a tweet outlining his argument that Twitter was not providing enough information.
pic.twitter.com/JcLMee61wj — Elon Musk (@elonmusk) July 11, 2022
During the weekend, word emerged of the legal heavyweights handling the case.
Locally, there was chatter over the impact of a full-blown trial coming to Delaware. A couple of posts expressed the hope that the case would make its way to the Sussex County courtroom.
Twitter is poised to hire the law firm of Wachtell, Lipton, Rosen & Katz. Expected to be part of the legal team is respected former Chancellor and Delaware Chief Justice Leo Strine.
Musk is likely to be represented by Quinn Emanuel Urquhart & Sullivan. That firm has helped Musk out of scrapes with regulators included a tweet about the possibility of taking Tesla private that drew the attention of securities regulators.
Musk has been showing signs of buyer’s remorse ever its board accepted his offer.
He had not been shy about his plans for Twitter and indicated he would be willing to bring back former President Donald Trump, who was banned from the site in the final days of his term following the Jan. 6 storming of the Capitol. A spokeswoman for Trump posts his musings on Twitter.
Lately, Musk has been attacking Twitter from time to time via Twitter. (See above). He followed up today with a photo of action star Chuck Norris playing chess.
Of late, the billionaire CEO of electric car maker Tesla and the Space-X rocket company has been doing well in Chancery Court. The court ruled in his favor in a lawsuit over whether he exerted too much influence over a buyout of a financially troubled. Solar City by Tesla. (Musk had stock in both companies).
As noted above, Musk claims Twitter has not met his demands to provide detailed information on its users, specifically auto tweeting “bots.” Twitter says it has complied with the terms of the deal and met demands for more detailed info.
The seldom mentioned elephant in the room is the beating technology stocks have been taking on Wall Street during the current bear market. As a result, there has been speculation that Musk would attempt to lower his offering price. No other suitors have emerged.
We know that advertising revenues on Twitter had never lived up to the potential cited when the company went public, with its CEO making a hasty departure as the stock price lagged.
The issue for Musk is that he signed an agreement to acquire the social media giant and has little wiggle room.
With billions of dollars at his disposal, Musk would mount a furious defense and would have to prove Twitter concealed information or took other steps that voided the agreement.
Meanwhile, the Twitter stock fell by seven percent, with no potential bidder in sight. For those of us in Delaware the popular social media phase “pass the popcorn” applies as this spectacle unfolds. – Doug Rainey, chief content officer.
