Elon Musk vs Twitter trial: start date and what do we know so far?
Elon Musk and Twitter will soon face off in court, if the two parties don’t reach a settlement agreement first, over the disputed $44 billion deal.
Elon Musk and Twitter are due to face off in court 17 October to resolve who is at fault for the collapse of the $44 billion deal for the head of Tesla to purchase the social media platform. The world’s richest man and Twitter CEO Parag Agrawal both postponed pretrial questioning scheduled for last week.
Musk is trying to get out of the acquisition without paying the $1 billion breakup fee but court filings last week could make that an uphill battle. The multi-billionaire could be forced to follow through with the purchase at the stated price by the Delaware Chancery Court if the two parties don’t reach an agreement before the five-day trial starts.
Musk backed out over number of fake accounts on Twitter
One of the stated reason for Tesla’s CEO walking away from taking Twitter private was the claim that far more than five percent of accounts on the social media platform were spam accounts. However, as part of pretrial hearings Twitter showed in court that Musk’s own data scientists mostly confirmed what the social media platform had been saying about the ratio of human and robot accounts.
On three occasions the founder of SpaceX notified Twitter that the social media platform had breached the terms of the acquisition agreement. The company said that Musk’s objections were “invalid and wrongful” each time.
The entrepreneur’s concern over the number of spam accounts also comes into question from a text message cited in the company’s original legal complaint from July. “Purging fake users will make the numbers look terrible,” Musk texted to Twitter chair Bret Taylor.
Could a settlement be reached before the October trial?
Talk of a potential settlement between the two parties raised hopes and Twitter’s stock price on Friday. Bloomberg reported that Ari Emanuel, legendary Hollywood agent and CEO of Endeavor, had spoken to both Musk and Twitter board member Egon Durban to ask them to “find a solution” in order to avoid a messy trial.
The Tesla CEO had made a premium offer of $54.20 per share in April which the company accepted. However, buyer’s remorse soon set in, especially as both Twitter’s and the electric carmaker’s stock dropped in value shaving a considerable amount off the billionaire’s fortune.
The social media network shares are now trading around $44 so there may be room for Twitter to settle for a lower purchase price. Robert Miller, a law professor with extensive experience in mergers and acquisitions, told Business Insider that “lawsuits are inherently dangerous.”
He expects Twitter and Musk to agree on a price of $50 per share if the acquisition is finally settled. “If Twitter decides it has a 1 in 10 chance of losing, it’s worth resolving,” Miller said. The steep discount would still be a good deal for shareholders giving them around $6 per share more than they currently have.