It’s been a whirlwind for three months since Elon Musk first made a $44 billion bid to buy Twitter, which has been filled with controversial Twitter polls, company-wide town halls, and a war on spam accounts and bots. But now, per an SEC filing from Friday it may all be over.
Musk has pulled out of the deal, and as a result, Twitter is suing the billionaire in Chancery Court in the State of Delaware in an effort to force him to fulfill the agreement, court documents dated July 12.
Here’s a quick look at how Musk and Twitter got here and what’s coming next for both sides.
The first purchase
Musk made his first offer to buy the company on April 25, 2022.
The billionaire has made a name for himself on the platform where he has amassed more than 100 million followers.
Musk bought the company for $54.20 per share in cash, which was valued at $44 billion in total. Twitter would become a publicly traded company under Musk if the deal closed in late 2022 as expected.
Tesla’s CEO said in a letter to Twitter chairman Brett Taylor via SEC filing that his offer to buy the company was his “best and last.”
“There will be distractions, but our goals and priorities remain unchanged. The decisions we make and how we execute them are in our hands, nobody else’s,” Twitter CEO Parag Agrawal said in a letter to employees at the time of the announcement. the first offer. “Let’s turn off the noise and stay focused on the work and what we’re building.”
The problem starts with following the bid
The road that followed the bid was anything but smooth.
Twitter employees and shareholders were less enthusiastic about the possible acquisition.
Over there were reports of workers protesting after Musk’s first offer, something Agrawal faced during a meeting where all employees were addressed about threats of a “mass exodus” of workers.
After the initial turmoil, two top Twitter execs (Kayvon Beykpour, the general manager of Consumer, and Bruce Falck, who served as lead for revenue products) left the company when Agrawal announced a staff freeze.
“Effective this week, we will be pausing most hires and additions, except for mission-critical roles as determined by employees in conjunction with their HRBPs. We will also review all expanded offerings to determine if they are essential and which should be withdrawn,” Twitter -CEO wrote in a memo to employees† “We’re not planning company-wide layoffs, but leaders will continue to make changes in their organizations to improve efficiencies as needed.”
Musk pauses the deal
A day later, Musk himself started making a fuss by accusing the company of lying about what percentage of the accounts on the site are bots and spam accounts.
In Twitter’s Q1 2022 Earnings Reportthe company disclosed that bots and spam accounts account for less than 5% of the total number of users on the site.
This prompted Musk to put his deal on hold.
“Twitter deal temporarily on hold pending details to support calculation that spam/fake accounts indeed represent less than 5% of users,” he tweeted, citing a Reuters article from earlier this month that quoted the estimated data from Twitter. “Still committed to acquisition.”
Things are starting to look up
Musk first addressed Twitter employees at a colorful town hall in June where he discussed his plans to expand Twitter’s user base and explained why he wanted to buy the company in the first place.
After the meeting it seemed like everything was “all systems working” SEC filing which showed that the Twitter Board unanimously urged shareholders to approve the pending deal.
“The board of directors of Twitter, after considering the factors more fully described in the attached proxy statement, has unanimously: (1) determined that the merger agreement is advisable and that the merger and the other transactions contemplated in the merger agreement, fair, advisable and in the best interests of Twitter and its shareholders; and (2) have accepted and approved the merger agreement, the merger and the other transactions contemplated in the merger agreement,” the submission listed†
Musk pulls out of the deal
On Friday, an SEC filing revealed that Musk had withdrawn his offer over allegations against Twitter and the company’s alleged inability to accurately disclose what percentage of users were bots and spam accounts. Its legal counsel said the company’s inability to do so was a “violation” of Twitter’s original agreement with the company.
Twitter chairman Brett Taylor tweeted that the company plans to sue Musk and force him to complete the acquisition.
“The Twitter Board is committed to closing the transaction at the price and terms agreed with Mr. Musk and plans to take legal action to enforce the merger agreement,” he said. said† “We are confident that we will prevail in the Delaware Court of Chancery.”
Musk’s original offer too included a clause that said there would be a $1 billion fee if he chooses to end the deal before it’s completed.
Musk doesn’t seem too concerned though, he’s been tweeting jokes and memes and taking the situation relatively lightly given how much money is at stake.
— Elon Musk (@elonmusk) July 11, 2022
One of these The memes posted by Musk contain four photos of himself indicating that Twitter will now have to reveal the information about the bots in court.
Twitter sues Musk
On July 12, Twitter filed a lawsuit against Elon Musk in Chancery Court hoping to force the billionaire to complete his $44 billion bid to buy the company.
“After putting on a public spectacle to bring Twitter into play and proposing and then signing a seller-friendly merger agreement, Musk apparently believes he—unlike any other party subject to Delaware contract law—is free to change your mind, disrupt the company, its operations, destroy shareholder value and walk away,” the lawsuit said stated:† “This denial follows a long list of material contractual violations by Musk that have put a damper on Twitter and his company. Twitter is taking this action to prohibit Musk from committing further infringements, to compel Musk to comply with his legal obligations, and to the consummation of the merger upon fulfillment of the few outstanding conditions.”
Musk’s only public response to the lawsuit was, of course, a Tweet.
“Oh the irony lol,” he wrote to his 100 million followers.
What happens next between the two is sure to turn into a hefty legal battle.
Twitter ran out 4.29% at market close on Tuesday.