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Tesla CEO says he'll pay $44B to buy Twitter

SHOTLIST:RESTRICTION SUMMARY:ASSOCIATED PRESSARCHIVE: San Francisco - 13 May 20201. Various exteriors of Twitter headquartersHEADLINE: Tesla CEO says he'll pay $44B to buy TwitterANNOTATION: Tesla CEO Elon Musk is proposing to buy Twitter at the originally agreed-upon price of $44 billion.++PARTIALLY COVERED++ASSOCIATED PRESSNew Orleans – 4 October 20222. SOUNDBITE (English) Ann Lipton, Associate Professor in Business Law and Entrepreneurship, Tulane University:"In fact, what's surprising is how unsurprising it all is. We all expected fireworks, given the color of this particular dispute. But the fact is cases settle on the eve of trial. They settle just before you have to depose the big people, the CEO, whatever. Musk's deposition is scheduled to begin October six. In some ways, the fact that they would settle just before then is the most natural and obvious thing in the world."ASSOCIATED PRESSWashington – 9 March 20223. STILL Elon Musk speaks at a conference++PARTIALLY COVERED++ASSOCIATED PRESSNew Orleans – 4 October 20224. SOUNDBITE (English) Ann Lipton, Associate Professor in Business Law and Entrepreneurship, Tulane University:"All we saw were some fairly anodyne text messages that Musk's co-investors sent him, and the press had an absolute field day with that. Now, Twitter's been getting all kinds of discovery on all of Musk's communications with everybody about this deal. I have absolutely no doubt it would have been also embarrassing, if only because he didn't expect that he was talking to be talking to a courtroom or the world at large. And from Twitter's perspective, I think it's interesting because I think there's very possible that Musk could have uncovered damaging things, not necessarily damaging enough to get him out of the deal. I mean, I think Twitter's case was always stronger. But that doesn't mean Musk couldn't have aired embarrassing facts about Twitter's business, but from Twitter's perspective. There's also the aspect that what do they care if they win and they get bought by Musk. Then as a company, it doesn't matter what got aired that was bad news for Twitter at that point. The shareholders are out. It's Musk's problem. So in that sense, Twitter could kind of be like, just fine, reveal it all. It doesn't matter as long as we win the case in the end, it doesn't actually matter because now it's Musk's problem as a company."++ENDS ON SOUNDBITE++STORYLINE:The tumultuous saga of Elon Musk's on-again off-again purchase of Twitter took a turn toward a conclusion Tuesday after the mercurial Tesla CEO proposed to buy the company at the originally agreed-on price of $44 billion. Musk made the proposal in a letter to Twitter that the company disclosed in a filing Tuesday with the U.S. Securities and Exchange Commission. It came less than two weeks before a trial between the two parties is scheduled to start in Delaware. In a statement, Twitter said it intends to close the transaction at $54.20 per share after receiving the letter from Musk.Trading in Twitter's stock, which had been halted for much of the day pending release of the news, resumed trading late Tuesday and soared 22% to close at $52.Musk's proposal is the latest twist in a high-profile saga involving the world's richest man and one of the most influential social media platforms. Much of the drama has played out on Twitter itself, with Musk — who has more than 100 million followers — lamenting that the company was failing to live up to its potential as a platform for free speech.A letter from Musk's lawyer dated Monday and disclosed by Twitter in a securities filing said Musk would close the merger signed in April, provided that the Delaware Chancery Court "enter an immediate stay" of Twitter's lawsuit against him and adjourn the trial scheduled to start Oct. 17.By completing the deal, Musk essentially gave Twitter what it was seeking from the court _ "specific performance" of the contract with Musk, meaning he would have to go through with the purchase at the original price. The contract Musk signed also has a $1 billion breakup fee.Eric Talley, a law professor at Columbia University, said he's not surprised by Musk's turnaround, especially ahead of a scheduled deposition of Musk by Twitter attorneys starting Thursday that was "not going to be pleasant.""On the legal merits, his case didn't look that strong," Talley said. "It kind of seemed like a pretty simple buyer's remorse case."If Musk were to lose the trial, the judge could not only force him to close the deal but also impose interest payments that would have increased its cost, Talley said.What did surprise Talley is that Musk doesn't appear to be trying to renegotiate the deal. Even a modest price reduction might have given Musk a "moral victory" and the ability to say he got something out of the protracted dispute, Talley said.Neither Twitter nor attorneys for Musk responded to requests for comment Tuesday.Musk has been trying to back out of the deal for several months after signing on to buy the San Francisco company in April. Shareholders have already approved the sale, and legal experts say Musk faced a huge challenge to defend against Twitter's lawsuit, which was filed in July. Musk claimed that Twitter under-counted the number of fake accounts on its platform, and Twitter sued when Musk announced the deal was off.Musk's argument largely rested on the allegation that Twitter misrepresented how it measures the magnitude of "spam bot" accounts that are useless to advertisers. Most legal experts believe he faced an uphill battle to convince Chancellor Kathaleen St. Jude McCormick, the court's head judge, that something changed since the April merger agreement that justifies terminating the deal.Legal experts said Musk may have anticipated that he would lose. Things haven't been going well for him in court recently, with the judge ruling more frequently in Twitter's favor on evidentiary matters, said Ann Lipton, an associate law professor at Tulane University. The judge's denied several of Musk's discovery requests, Lipton said.It's also possible that Musk's co-investors in the deal were starting to get nervous about how the case was proceeding, she said.Musk's main argument for terminating the deal – that Twitter was misrepresenting how it measured its "spam bot" problem – also didn't appear to be going well as Twitter had been working to pick apart Musk's attempts to get third-party data scientists to bolster his concerns.Columbia's Talley said he would insist on Musk putting money into an escrow account until the deal is completed. Such an account could hold cash and/or Twitter shares, as a good-faith demonstration by Musk, Talley suggested.Mysteriously, neither Musk nor Twitter CEO Parag Agrawal have written anything about the deal on Twitter, where many developments in the dispute have been aired. Many of Musk's tweets in the past 24 hours have been about a divisive proposal to end Russia's invasion of Ukraine, drawing the ire of Ukrainian President Volodymyr Zelenskyy. If the deal does go through, Musk may be stuck with a company he damaged with repeated statements denouncing fake accounts, Susannah Streeter, senior markets analyst for Hargreaves Lansdown in the United Kingdom, wrote in an investor note. "This is an important metric considered to be key for future revenue streams via paid advertising or for subscriptions on the site, and his relentless scrutiny of Twitter's figures over the last few months is likely to prompt questions from potential advertising partners," she wrote.===========================================================Clients are reminded: (i) to check the terms of their licence agreements for use of content outside news programming and that further advice and assistance can be obtained from the AP Archive on: Tel +44 (0) 20 7482 7482 Email: they should check with the applicable collecting society in their Territory regarding the clearance of any sound recording or performance included within the AP Television News service (iii) they have editorial responsibility for the use of all and any content included within the AP Television News service and for libel, privacy, compliance and third party rights applicable to their Territory.




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