UPDATE: Twitter vows legal fight after Musk pulls out of $44 billion deal

[BumRushDaShow]

Last edited Sat Jul 9, 2022, 05:47 PM - Edit history (1)

Source: Reuters

July 8 (Reuters) - Elon Musk, the chief executive officer of Tesla (TSLA.O) and the world's richest person, said on Friday he was terminating his $44 billion deal to buy Twitter (TWTR.N) because the social media company had breached multiple provisions of the merger agreement.

Twitter's chairman, Bret Taylor, said on the micro-blogging platform that the board planned to pursue legal action to enforce the merger agreement. "The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk...," he wrote.

In a filing, Musk's lawyers said Twitter had failed or refused to respond to multiple requests for information on fake or spam accounts on the platform, which is fundamental to the company's business performance. "Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement," the filing said.

Musk also said he was walking away because Twitter fired high-ranking executives and one-third of the talent acquisition team, breaching Twitter's obligation to "preserve substantially intact the material components of its current business organization."



Read more: https://www.reuters.com/technology/elon-musk-terminating-twitter-deal-2022-07-08/

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Current update -

July 9, 20224:23 AM EDT
Last Updated 13 hours ago


Previous update and headline -

Elon Musk looks to abandon $44 billion Twitter deal

July 8 (Reuters) - Tesla Inc (TSLA.O) Chief Executive Officer Elon Musk said on Friday he was terminating his $44 billion deal for Twitter Inc (TWTR.N), saying that the social media company had failed to provide information about fake accounts on the platform. Shares of Twitter were down 7% in extended trading. Musk had offered $54.20 per share in April.

In a filing, Musk's lawyers said Twitter had failed or refused to respond to multiple requests for information on fake or spam accounts on the platform, which is fundamental to the company's business performance.

"Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement," the filing said.

The announcement is another twist in a will-he-won't-he saga after the world's richest person clinched a $44 billion deal for Twitter in April but then put the buyout on hold until the social media company proved that spam bots account for less than 5% of its total users. The terms of the deal require Musk to pay a $1 billion break-up fee if he does not complete the transaction.

Short article - now updated. Lots of breakings from other sources are flying now.

Original article and headline -

Elon Musk terminates $44 bln Twitter deal

July 8 (Reuters) - Tesla (TSLA.O) Chief Executive Officer Elon Musk said on Friday he was terminating his $44 billion deal for Twitter Inc (TWTR.N), citing material breach of multiple provisions of the agreement.

Shares of Twitter fell 6% in extended trading.

The announcement brings to an end a will-he-won't-he saga after the world's richest person clinched a deal for Twitter in April but then put the buyout on hold until the social media company proved that spam bots accounted for less than 5% of its total users.

Here is AP's similar shortish article -

Elon Musk says he's terminating $44B Twitter buyout deal


By BARBARA ORTUTAY 16 minutes ago


Elon Musk's tumultuous $44 billion bid to buy Twitter is on the verge of collapse -- after the Tesla CEO sent a letter to Twitter's board Friday saying he is terminating the acquisition. Twitter did not immediately respond to a message for comment. It is not entirely clear whether Twitter's board will accept the $1 billion breakup fee or if there will be a court battle over the deal.

The possible unraveling of the deal is just the latest twist in a saga between the world's richest man and one of the most influential social media platforms. Much of the drama has played out on Twitter, with Musk -- who has more than 95 million followers -- lamenting that the company was failing to live up to its potential as a platform for free speech.

On Friday, shares of Twitter fell 5% to $36.81, well below the $54.20 that Musk had offered to pay. Shares of Tesla, meanwhile, climbed 2.5% to $752.29.

In a letter to the Securities and Exchange Commission, Musk said Twitter has "not complied with its contractual obligations" surrounding the deal, namely giving Musk enough information to "make an independent assessment of the prevalence of fake or spam accounts on Twitter's platform."

(snip)

https://apnews.com/article/elon-musk-twitter-inc-technology-4193a27d86458952542dfa2176150a01

[Novara]

1. Good. Now go away.

[2naSalit]

7. +1

[pazzyanne]

29. + 1 nt

[modrepub]

50. ..or I shall Taunt You A Second Time

[h2ebits]

2. Let the lawsuits begin!!

This will be tied up in courts for years with 1Billion dollars at stake.

[getagrip_already]

12. and not just twitter the company suing him....

his own tesla investors are suing him, twitters stockholders will sue him, the sec will take a deep look at him.......

I guess he figures whatever the court process costs him, it would be less than overpaying for twitter outright.

Or he is planning on buying a scotus vote to let him off the hook

[Warpy]

18. Twitter has never turned a profit

Any lawsuit will be perfunctory and be settled quickly out of court. They no longer have the cash to do much more.

Nobody else has any standing to sue, including TFG--who really, really wanted to be able to tweet again.

[getagrip_already]

21. the investors have standing....

he drove various stock prices up and down with public statements and then pulled the rug out based on bad faith negotiations (what the investors will claim).

His own investors are already suing him over "false" statements he made that affected tesla stock price.

There is a lot of meat on his bones. It will draw a lot of carrion hunters to the scene.

[Warpy]

30. That's going to be tough to prove

given the bloodbath among tech stocks. It will be a hard sell to convince a bunch of people, especially those who went for fast money in tech stocks, that Twitter was an isolated case and entirely manipulated by Musk.

[Jazz Jon]

28. Excellent

It couldnt have happened to a nicer guy. ....Musk is a creep. Take his money away before he can hurt anybody else with it.

[musette_sf]

3. Insert

shocked Pikachu face here

[Lil Liberal Laura]

4. "terminates"

Is Reuters hinting at something?

[patphil]

5. Good! I didn't want that A-hole getting his hands of Twitter.

[2naSalit]

6. Ahahahahaaa!!

[Calista241]

8. This could be true, and it could be Musk going through his M&A plan.

Especially if he wants to lower the price. Walking away, or appearing to walk away, is the best way to get a better deal.

[calguy]

9. The world's biggest bullshitter

[somaticexperiencing]

10. What an asshole! Fly into space, Elon. You won't be missed.

[Rebl2]

13. Yes please

[sinkingfeeling]

11. As predicted.

[OldBaldy1701E]

25. And BTW, bravo to all those who saw this coming! (n/t)

[efhmc]

57. Not to devalue anyone but most people with any sense knew this was not a viable deal considering EM.

Big blowhard.

[OldBaldy1701E]

58. I suppose I should clarify.

Bravo to those who saw it coming and were vocal about it.

[efhmc]

59. Ah. Easy to say I told you so after the fact. Still could not have happened to a more deserving

person. Wonder if Twitter will ever get any money from him.

[OldBaldy1701E]

60. One can hope... (n/t)

[Gore1FL]

14. It cost him a billion to terminate and all of his TSLA value dropped, too.

I am happy he isn't buying Twitter.
I am happy it is costing him $1,000,000,000 to not buy Twitter
While I am not exactly happy that TSLA investors took a loss, I am happy Musk did.

[former9thward]

56. Tesla stock went up about 30 points Friday after his announcement.

Both while the market was open and after market moves. Which means Musk made about $5 billion on Friday because of his announcement. He owns 175 million shares of Tesla. So he would be happy to lose $1 billion while making $5 billion.

[OhZone]

15. Ha!

[C Moon]

23. Took the words right out of my mouth!

[Montauk6]

16. MUSKY'S RAISIN' THE WHITE FLAG???!!!!

BTW, how are you not going to know that people fake accounts on social media?

[LetMyPeopleVote]

17. Twitter will be suing Musk for breach of merger agreement

Link to tweet

[48656c6c6f20]

19. Was this a plan to tank Twitter stocks

And give that other POS platform a leg up? Is that why the feds are interested in that other shitty social media platform?

[quakerboy]

40. Tank their stocks by giving them the best shot at record profit they have ever had?

[LudwigPastorius]

20. _

[LetMyPeopleVote]

22. This will be fun to watch

Link to tweet

[yaesu]

24. I heard he's marketing his own pillow line, calling them rocket sleepers

[Mr.Bill]

26. This whole Twitter thing was nothing but a stunt.

If it costs him some money to bail out, so what. What's a few billion here or there, right?

I know he can't be president because he wasn't born in the USA, but mark my word, some day this guy will be more dangerous and cause more trouble than Trump.

[area51]

32. Curiously,

Ted Cruz, John McCain and Mitt Romney were allowed to run for president, and none of them were born in the US.

[Mr.Bill]

34. All these were looked at by the courts.

Cruze's mother was an American citizen. Both of McCain's parents were citizens (his father was an Admiral in the US Navy) and he was born in the Canal Zone in Panama, A US territory. Romney's parents were also US citizens. So yes, exceptions have been carved out by the courts. Musk would be elegible for none of these exceptions.

[Polybius]

44. None of them won, so it never was really tested

As I said to the other poster though, Mitt was born in Harper University Hospital in Detroit, Michigan.

[Polybius]

43. You're wrong about Mitt

He was born in Harper University Hospital in Detroit, Michigan.

[SergeStorms]

35. Trump was mostly known....

to be a crooked, tasteless, liar to those in New York. Most of the nation knew him from his ridiculously phoney TV show. They made him look like he was some huge multi-billionaire business executive, when nothing could be farther from the truth. He pretty much ran a crooked family business, and that was it.

That's how he fooled most of the rubes who joined his cult anyway.

Everyone in the country knows Musk's game, or at least that he's not what he thinks he is.

That would be my take on it. I don't think Musk will be able to cause too much trouble. This Twitter thing will bring his reputation back down to earth when all is said and done.

Anyway, I certainly hope he doesn't cause anymore trouble than the Trump family is already planning.

[Mr.Bill]

36. I had Trump figured out in the early 70s.

But I'm 69 years old. Must people that are much younger actually believed the myth of Trump. They don't remember his bankruptcys, or a judge literally putting him on an allowance because of his financial problems. They only know him as the reality show star. I've talked to people under thirty who to this day think he is the richest man in the world. And how many have preached for decades that we need a businessman to run this country because the politicians have failed at it. Remember, nit everyone follows politics like we here do. These people watch Big Bang Theory reruns instead of the news.

A future generation may see Musk as Henry Ford and Thomas Edison rolled into one. He is neither, but perception can drive votes. That's why I'm glad he can't run.

Now we enter the lawsuit phase of his publicity scam. If he wins and makes Twitter look like the bad guys, look out.

[SergeStorms]

37. People just don't pay attention anymore.

It wouldn't be difficult for anyone to find out the truth about Trump, or Musk for that matter. This is the "information age", after all. Everyone is too busy taking selfies, or like you said, watching benign, brain rotting TV shows.

Let's hope Twitter perseveres against Musk and makes him look like the egotistical fool he actually is. Maybe this ludicrous hero worship of seriously flawed wealthy people will pass. Putting someone on a pedestal for no other reason than wealth is as dangerous as it is stupid. I think we both agree on that.

[Mr.Bill]

38. Absolutely. n/t

[sellitman]

27. Oh no.

You mean we won't see the Orange Man on Twitter any time soon?

[NullTuples]

31. Doncha hate it when you are an a**hole when you're flying high and then crypto crashes,

your car company stock sinks because of you, and all at a time when you were barely able to cobble together the financing from not-top-tier financiers for your big swagger move?

I still wonder though, about that massive Twitter data feed he was able to get his hands on...

[BumRushDaShow]

33. A trifecta of fail

[moonshinegnomie]

39. musk is going to learn about specific peformance

the merger docs allow twitter to force musk to but the company whether he wants to or not.
page 70 of the merger docs say
a) The parties hereto agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the parties hereto do not perform the provisions of this Agreement (including failing to take such actions as are required of it hereunder to consummate this Agreement) in accordance with its specified terms or otherwise breach such provisions. Accordingly, the parties hereto acknowledge and agree that the parties hereto shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity. Each of the parties hereto agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that any other party has an adequate remedy at law or that any award of specific performance is not an appropriate remedy for any reason at law or in equity. Any party seeking an injunction or injunctions or any other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement shall not be required to show proof of actual damages or provide any bond or other security in connection with any such order or injunction.

https://www.sec.gov/Archives/edgar/data/1418091/000119312522120474/d310843ddefa14a.htm

[LiberalFighter]

51. Is this too complicated for him to understand?

[Marthe48]

41. Is this the only time musk has pulled out?

>snicker<

Saw it on one of my groups. lol

[lonely bird]

42. Musk is a salesman

Nothing more, nothing less.

His problem is that he has reached the stage where his mouth is writing checks his ass can’t back up.

Someday, the people of this country and likely elsewhere will arrive at the realization that “success” in one field does not arbitrarily translate to success in another field.

Much like virtually any celebrity from anywhere people swooned over him without actually looking him. Critical thinking is in short supply.

[jmowreader]

45. The strange part is...

I suspect Musk employs quite a few of the "fake or spam accounts" on Twitter.

Let's say a Tesla burns to the ground and it takes the fire department 25,000 gallons of water to put it out. There'll be like a brazillion posts declaring how great Teslas are when they don't catch fire, how Musk is the next Nikola Tesla, how they love their cars, etc., etc., etc. I know the people who buy Teslas generally like them, but the level of adoration surrounding them is a bit suspicious.

[newdayneeded]

46. Maybe it'll go this way...

Twitter- Hey you said you'll buy our company for 44B. We'll sue to make sure you buy.

Musk- I don't want to buy your company.

Twitter- (sweating) But darn it you promised, We'll put you on double secret probation!! (knowing they don't have a leg to stand on.)

Musk- fine. I'll buy it for 25B.

Twitter- YAY!!!!!!!!

[BumRushDaShow]

47. I doubt it

because his clown show depressed the stock price and he signed an agreement and his best "out" is to pay the $1 billion and move on.

This sort of thing happened in the past during earlier (hostile bid) merger attempts.

AT&T & T-Mobile went through this just over a decade ago -

T-Mobile and AT&T: What’s $2 Billion Among Friends?

By Michael J. de la Merced December 20, 2011 9:22 am


You say “po-TAY-to,” I say “po-TAH-to.” But in the case of the T-Mobile USA deal’s breakup fee, it’s a very big root vegetable.

In announcing on Monday that it was ending the $39 billion takeover attempt, AT&T said it would pay T-Mobile’s parent, Deutsche Telekom, a $4 billion breakup fee. But on Tuesday morning, Deutsche Telekom officials placed the value of the fee at a significantly higher $6 billion.

(snip)

https://archive.nytimes.com/dealbook.nytimes.com/2011/12/20/att-and-t-mobile-whats-2-billion-among-friends/

Mike Isaac Business Dec 19, 2011 5:41 PM
AT&T Drops Its T-Mobile Merger Bid in $4B Fail



Faced with the prospect of a long war with U.S regulators it seemed destined to lose, AT&T announced on Monday it would give up on its $39-billion attempt to purchase T-Mobile, even though the decision will cost the nation's number-two carrier at least $4 billion to walk away from the deal.

The proposed merger would have brought together the second- and fourth-largest telecommunications carriers in the United States, ultimately surpassing Verizon Wireless to be the largest telecom in the country. As recently as 11 days ago AT&T said it would not back down (though Chief Financial Officer John Stephens did seem to betray a bit of uncertainty). Instead, AT&T is out $4 billion with nothing to show for a proposed merger that drew instant fire from consumer groups and spectrum geeks.

Further, AT&T will be forced to transfer radio spectrum to T-Mobile, as well as "enter a mutually beneficial roaming agreement with Deutsche Telekom," according to AT&T's statement. The entire package will cost AT&T $3 billion in cash, plus at least another billion or more in spectrum and network sharing agreements.

Not that AT&T is conceding the merger was a bad idea.

(snip)

https://www.wired.com/2011/12/att-tmobile-merger-ends/

[SouthernDem4ever]

48. Conservatives are all upset that Musk isn't going to save their rights to free speech

What they really mean is they don't have the right to spread dangerous misinformation and lies. No one ever stopped their comments on twitter unless they were from dangerous people with nefarious intentions. If conservatives only classify their "speech" in this manner then so be it.

[Brainfodder]

49. This just another example of ODD twisted assholian greed?

[LiberalFighter]

52. Musk needs to pay more than the $1 billion.

Should include attorney fees.

Ban him and his employees from access to Twitter

Require cost of any airline fuel for his private or charter jets be four times the cost.

[LetMyPeopleVote]

54. The Merger Agreement provides for specific performance as a remedy

This is where the litigation will be interesting

https://www.sec.gov/Archives/edgar/data/1418091/000119312522120461/d310843dex21.htm

Section 9.9 Specific Performance.

(a) The parties hereto agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the parties hereto do not perform the provisions of this Agreement (including failing to take such actions as are required of it hereunder to consummate this Agreement) in accordance with its specified terms or otherwise breach such provisions. Accordingly, the parties hereto acknowledge and agree that the parties hereto shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity. Each of the parties hereto agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that any other party has an adequate remedy at law or that any award of specific performance is not an appropriate remedy for any reason at law or in equity. Any party seeking an injunction or injunctions or any other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement shall not be required to show proof of actual damages or provide any bond or other security in connection with any such order or injunction.

(b) Notwithstanding anything herein to the contrary, including the availability of the Parent Termination Fee or other monetary damages, remedy or award, it is hereby acknowledged and agreed that the Company shall be entitled to specific performance or other equitable remedy to enforce Parent and Acquisition Sub’s obligations to cause the Equity Investor to fund the Equity Financing, or to enforce the Equity Investor’s obligation to fund the Equity Financing directly, and to consummate the Closing if and for so long as, (i) all of the conditions set forth in Section 7.1 and Section 7.2 (other than those conditions that are to be satisfied at the Closing; provided, that such conditions are capable of being satisfied if the Closing were to occur at such time) have been satisfied or waived and Parent has failed to consummate the Closing on the date required pursuant to the terms of Section 2.2, (ii) the Debt Financing (or, as applicable, the Alternative Financing) has been funded or will be funded at the Closing if the Equity Financing is funded at the Closing, and (iii) the Company has confirmed that, if specific performance or other equity remedy is granted and the Equity Financing and Debt Financing are funded, then the Closing will occur. For the avoidance of doubt, (A) while the Company may concurrently seek (x) specific performance or other equitable relief, subject to the terms of this Section 9.9, and (y) payment of the Parent Termination Fee or other monetary damages, remedy or award if, as and when required pursuant to this Agreement), under no circumstances shall the Company be permitted or entitled to receive both a grant of specific performance to cause the Equity Financing to be funded, on the one hand, and payment of the Parent Termination Fee or other monetary damages, remedy or award, on the other hand; provided, however, that in no event shall the Company be permitted or entitled to receive aggregate monetary damages in excess of the Parent Termination Fee (except in all cases that Parent shall also be obligated with respect to its expense reimbursement and indemnification obligations contained in Section 6.11 and its applicable obligations under Section 8.3(d)(iii) and Section 8.6(b)).

(c) To the extent any party hereto brings an action, suit or proceeding to specifically enforce the performance of the terms and provisions of this Agreement (other than an action to enforce specifically any provision that expressly survives the termination of this Agreement), the Termination Date shall automatically be extended to (i) the twentieth (20th) Business Day following the resolution of such action, suit or proceeding or (ii) such other time period established by the court presiding over such action, suit or proceeding.

[LetMyPeopleVote]

53. Twitter has hired Wachtell Lipton to sue Musk

Link to tweet