Twitter might push for the deal to be forced forward… The judge might disagree and force the withdraw penalty…
Therefore Twitter can’t be sued as the judge ordered it.
The SEC must be looking at the outcome of this very closely… they’ll be wanting to put a boot into musk
Pivot has been amazing on this, you can tell Prof G is feeling another WeWork style debacle and that made his name.
Their is a third option which would be to pay the $1bn AND restitution to the shareholder of $XXbn.
I would also recommend signing up to the Matt Levine substack, it’s not behind a paywall like his Bloomberg writing. It’s deep and a bit wordy at times but goes into the legal aspects from a former M&A banker.
The withdrawal penalty isn’t a withdrawal penalty, it’s the breakup fee for when the deal can’t be completed for reasons beyond either parties control, i.e: financing falls through, or regulatory intervention prevents the deal from going through. For the breakup fee to be appropriate, the judge would have to determine that the deal has been unable to complete for reasons beyond Musk’s control which is exceptionally unlikely because Musk has made very clear that it’s his choice for this deal not to complete (i.e: he still has the financing, but he believes Twitter aren’t acting in good faith).
The realistic best case for Musk is that the judge orders him to pay Twitter the amount of financial damage he has caused to Twitter shareholders (i.e: the number of outstanding shares (less his own holding) multiplied by the difference between the current share price and Musk’s offer, which would be ~700,000,000 shares * ($54.20 - $39.60) = ~$10 billion) and the worst case is he is forced to complete the deal. Either way, the tens-of-billions of financial harm to Musk is a foregone conclusion, the question is not “will this cost Musk a lot of money?” (it will) but rather “will Musk be burdened with owning Twitter?”.
I would be exceptionally surprised if this costs Musk any less than $10,000,000,000. There’s zero ambiguity about the harm Musk has caused to Twitter, not just in terms of the share price (which is quantifiable in monetary terms) but the chaos caused by the harmful comments he has made (including an exodus of important, valuable employees). I would not be surprised if the cost of this, to Musk, exceeds $20,000,000,000 all said and done. I highly recommend reading the lawsuit, Musk could not have put himself in a worse position if he tried.
I just wish the Delaware courtroom was televised. I don’t watch much TV but I found the absurdity of the Herd/Depp trial to be gripping - I think I watched about 90% of it.
I feel that this is going to be just as weird and just as good.
There’ll be a TV drama about it, as well as plenty on analysis
I just got this message over at AJ Hell:
Further to our previous communication, we have received an update regarding the Twitter Inc takeover vent.
A Special Meeting will be held on 13 September 2022 to approve the previously announced offer by Elon Musk.
If the transaction is completed, you are expected to receive USD54.20 in exchange for each share held.
Please note, that there is an ongoing lawsuit between Elon Musk and Twitter Inc. Further updates will be released up on receipt.
To view the announcement in full, please copy and paste the link below into your web browser:
https://sec.report/Document/0001193125-22-202163/
Pay up Musk!
Of course they urged.
The current price is tanked because of musk
So it turns out that after all that bluster Elon is going to make good on his legally binding contract and looks to complete on his purchase of Twitter at $54.20
Or perhaps to be careful when buying what I call ‘celebrity stocks’ where an individual (like Musk) has got more publicity then the actual company itself.
$TWTR and $TSLA come to mind
So will Elon Musk have to pay us 54.20 USD per share now to buy us out, as he will remove twitter from the stock market?
There will be term issues when the deal closes for when the money will be distributed to shareholders but you’re right as far as what will happen.
He’s paying you $54.20 for something more likely worth $20/$25 so a good day at the office @mahdi.jawad
The lawsuit is still ongoing…
Private Deposition should have occured Wednesday. part of the issue (and perhaps why Musk announced) is that messages about how he raised funding got admited, and potentially didnt - which if true could lead to further issues.
Keep this on the tracker twitter fans, It still has legs to run
Twitter lawyers still want the trial to go ahead, maybe rather prudently, they said that stopping the trial would be
“an invitation to further mischief and delay.”
That relationship has soured to the point they don’t even accept his word anymore - can’t say I blame them.
“This action is stayed until 5 p.m. on October 28, 2022, to permit the parties to close on the transaction. If the transaction does not close by 5 p.m. on October 28, 2022, the parties are instructed to contact me by email that evening to obtain November 2022 trial dates,” McCormick wrote.
Lawyers wanting a trial to go ahead who would have thought it .
