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Twitter last week filed suit against Musk, seeking to force the mega-billionaire complete his $44 billion buyout agreement. That came after Musk on July 8 told Twitter he wanted to nix the deal over his suspicions that Twitter has more spam and bot accounts than it acknowledges. In its lawsuit, Twitter alleged the spam/bot issue is a red herring — and that Musk is suffering from buyer’s remorse, because the deal has become more expensive for him personally given the drop in Tesla’s stock price.
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Twitter had asked the court for an expedited hearing, with a trial that would conclude before the end of September 2022. Musk’s legal team, in a filing last Friday, argued that the case should go to trial no sooner than Feb. 13, 2023.
In her ruling Tuesday, Chancellor Kathaleen S. McCormick of the Delaware Court of Chancery set the case as a five-day trial that will occur in October, with the parties to work out the details.
“In this case, Twitter seeks specific performance” — that is, the company is demanding Musk pay the original $44 billion purchase price — “and it is not at all apparent that [awarding monetary] damages could constitute a sufficient remedy if Twitter ultimately proves its case,” McCormick said at the hearing Tuesday.
Twitter had argued the case should be expedited because the company and its shareholders were left in “limbo” by Musk’s move to bail on the binding agreement, which was announced April 25. Lawyers for Musk, in their filing opposing Twitter’s request for an expedited trial, complained that Twitter made a “sudden request for warp speed after two months of foot-dragging and obfuscation.”
It’s possible that Twitter and Musk could work out a settlement prior to the matter going to trial.
Twitter alleges that Musk has repeatedly violated the terms of his agreement to buy the company by tweeting disparagingly about Twitter and its employees, putting the business at risk and depressing the stock price. Musk’s lawyers have countered that the world’s wealthiest individual is just calling things as he sees them — and that it’s his right to call out questionable claims of an acquisition target — and also that Musk (who is Twitter’s largest single shareholder with a 9.6% stake) has a vested interest in maximizing Twitter’s market value.
Twitter is scheduled to report second-quarter 2022 earnings on Friday, July 22, before the market opens. “In light of the pending acquisition by an entity affiliated with Elon Musk, Twitter will not host an earnings conference call for its second quarter 2022 results,” the company said.
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