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Elon Musk’s lawyers were trying to delay the upcoming high-profile legal showdown with Twitter until 2023. However, moments ago, the Delaware Court of Chancery ruled in favor of an expedited trial.
To wit, the 5-day legal showdown between Elon Musk and Twitter is now expected to take place in October. Bear in mind that Musk’s legal team had requested time from the court in order to exhaustively examine the quantum of spam accounts that populate Twitter.
As a refresher, Elon Musk had officially walked away from the agreement to acquire Twitter a few days back, alleging that, in contravention to the purchase agreement, the social media platform failed to provide pertinent information “related to the consummation of the transaction.” Specifically, Musk has identified Twitter’s failure to satisfactorily prove the fidelity of its Monthly Active Users (MAUs) metric as a major stumbling block. Bear in mind that Twitter has consistently maintained that less than 5 percent of the active accounts on the platform could be defined as bots or fake accounts, a claim that has been declared dubious by Musk on several occasions.
The other major reason cited by Elon Musk to walk away from the deal centered on Twitter’s failure to “preserve substantially intact the material components of its current business organization.” Here, Musk cited Twitter’s recent decision to fire two key executives as well as layoff a third of its talent acquisition team.
For its part, Twitter has continued to claim that the quantum of bots on the platform is not a material legal impediment to the consummation of the takeover deal, as Elon Musk had waived due diligence during the negotiations phase. In its lawsuit filed with the Chancery Court of Delaware last week, Twitter had alleged:
“Musk apparently believes that he — unlike every other party subject to Delaware contract law — is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away. This repudiation follows a long list of material contractual breaches by Musk that have cast a pall over Twitter and its business.”
Bear in mind that the opening comments today from Twitter’s side were predictably combative, alleging that Elon Musk’s conduct is tantamount to “sabotage”.
"Mr. Musk is required to use Reasonable Best Efforts to close this deal.
"What he is doing is the exact opposite of Best Efforts: it's his best effort at sabotage."
"Egregious, breaching, willful conduct."
— Compound248 (@compound248) July 19, 2022
Twitter shares are up over 3 percent at the time of writing, while Tesla shares are essentially flat at the moment.