Tag Archives: Elon Musk Twitter deal

Ordering A Deal To Close

Elon Musk has cancelled a massive deal with Twitter

The judge overseeing Twitter Inc’s $44 billion lawsuit against Elon Musk has a no-nonsense reputation as well as the distinction of being one of the few jurists who has ever ordered a reluctant buyer to close a U.S. corporate merger.

Kathaleen McCormick took over the role of chancellor or chief judge of the Court of Chancery last year, the first woman in that role. On Wednesday, she was assigned the Twitter lawsuit which seeks to force Musk to complete his deal for the social media platform, which promises to be one of the biggest legal showdowns in years.

“She already has a track record of not putting up with some of the worst behavior that we see in these areas when people want to get out of deals,” said Adam Badawi, a law professor who specializes in corporate governance at the University of California Berkeley. “She is a serious, no-nonsense judge.”

In contrast to Musk’s brash and volatile behavior, she is known as soft-spoken, approachable and amiable — but a person who also stands her ground. She advocates respect among litigants and integrity at legal conferences.

“We’ve always had each other’s backs, we’ve always gone out for drinks after arguments and maintained this level civility,” she told a gathering at the University of Delaware this year.

After weeks of confrontational tweets suggesting Twitter was hiding the true number of fake accounts, Musk said on Friday he was terminating the $54.20-per-Twitter share acquisition, worth $44 billion. On Tuesday, the social media platform sued.

Judges have ordered reluctant buyers to close corporate acquisitions only a handful of times, according to legal experts and court records. One of those was McCormick.

Last year, McCormick got the attention of Wall Street dealmakers by ordering an affiliate of private equity firm Kohlberg & Co LLC to close its $550 million purchase of DecoPac Holding Inc, which makes cake decorating products.

She described her ruling as “chalking up a victory for deal certainty” and rejected Kohlberg’s arguments that it could walk away because of a lack of financing.

The case has many parallels to the Twitter deal. Like Musk, Kohlberg said it was walking away because DecoPac violated the merger agreement. Like Musk, Kohlberg argued in part that DecoPac failed to maintain ordinary operations.

There are also differences. Musk’s deal is magnitudes bigger, involves a publicly traded target company in Twitter and might have implications for Tesla Inc, the electric vehicle maker that is the source of much of Musk’s fortune.

In other cases, she has come down on the side of shareholders when they clashed with management.

Last year, she prevented energy company The Williams Cos Inc from adopting a so-called poison pill anti-takeover measure, saying it breached their fiduciary duty to shareholders.

Last month, she said shareholders of Carvana Co could sue the board for a direct offering of stock to select investors when the share price was depressed during the early pandemic.

A graduate of Notre Dame Law School, McCormick started her career with the Delaware branch of the Legal Aid Society, which helps low-income people navigate the court system.

She went into private practice “mainly for financial reasons,” she told the Delaware Senate during her confirmation hearing, joining Young Conaway Stargatt & Taylor, one of the state’s main firms for business litigation.

She joined the Court of Chancery in 2018 as a vice chancellor and became the first woman to lead the Court of Chancery last year.

Despite her mild manner, Eric Talley, who specializes in corporate law at Columbia Law School, said he doubts McCormick would be cowed by Musk.

“I would not be placing my bets on Chancellor McCormick suddenly becoming weak-kneed,” he said.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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Elon Musk Says Twitter Deal At Lower Price “Not Out of the Question”

Elon Musk last week said his bid to buy Twitter was “temporarily on hold”

Miami:

Elon Musk stoked speculation that he could seek to renegotiate his takeover of Twitter Inc., saying a viable deal at a lower price wouldn’t be “out of the question.”

Twitter shares fell 8.2 per cent at the close of trading in New York. The stock has been dropping on speculation that Musk could walk away from the $44 billion acquisition. That concern has grown in the past week as Musk has questioned Twitter’s publicly disclosed data on the percentage of spam and fake accounts on its social media service.

Musk pressed further on that front Monday at a Miami tech conference, estimating that fake users make up at least 20 per cent of all Twitter accounts. That was the low end of his estimate on the number of bots on the network, and he asked rhetorically if it could be as high as 90%, according to a livestreamed video of his remarks posted by a Twitter user.

“Currently what I’m being told is that there’s just no way to know the number of bots,” Musk said at the conference. “It’s like, as unknowable as the human soul.”

Twitter declined to comment. The San Francisco-based company reports quarterly that spam accounts make up less than 5 per cent of total users.

Musk, chief executive officer of Tesla Inc. and SpaceX, last week said his bid to buy Twitter was “temporarily on hold” pending details about how many spam and fake accounts are on the platform. Over the weekend, he tweeted that he planned to do his own analysis of Twitter’s user base by using a random sample of 100 user accounts. Shortly after, Musk claimed that Twitter’s legal team called to complain that he had violated their non-disclosure agreement by publicly sharing the company’s methodology.

Twitter CEO Parag Agrawal disputed that on Monday in a tweet thread that offered more details on the company’s approach to spam accounts. Agrawal said Twitter manually checks thousands of accounts every quarter to determine how many should be counted as spam, but added that the process could not be conducted externally because of user privacy concerns.

Agrawal said Twitter “shared an overview of the estimation process with Elon a week ago.” Musk replied to the CEO’s tweet thread by first asking why Twitter doesn’t just call users to verify their identity — and then by posting a poop emoji.

Musk spoke at a conference hosted by a podcast called “All-In” run by Chamath Palihapitiya, Jason Calacanis, David Sacks and David Friedberg. The $7,500-per-person event was sold out, and organizers said journalists were excluded from attending. Musk appeared at the Miami summit via videoconference.

The 50-year-old billionaire began buying Twitter shares in January and disclosed a 9.2 per cent stake in the company on April 4. Twitter’s board accepted Musk’s $44 billion bid to buy the company and take it private on April 25, but the deal is months away from closing, and Twitter’s shares are trading far below the offer price.

The spread between Musk’s $54.20-a-share bid and Twitter’s share price continues to widen, wiping out all the gains the stock had made since Elon Musk disclosed his stake in the social media platform.

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Buzz Over Elon Musk’s Tweet

New Delhi:

Tesla CEO Elon Musk, known to stir up a storm with his tweets, sparked another buzz today in a post talking about death under “mysterious circumstances”.

“If I die under mysterious circumstances, it’s been nice knowin ya,” tweeted Mr Musk, about a week after he announced his decision to buy micro-blogging site Twitter for $44 Billion.

Shortly before this, Mr Musk shared a post that appears to be a communication saying he is involved in “supplying the fascist forces in Ukraine with military communication equipment”. “And for this, Elon, you will be held accountable like an adult – no matter how much you’ll play the fool,” the post adds. 

The communication also claimed that the equipment was delivered in Ukraine by the Pentagon, headquarters of the US Department of Defense.

The two posts sparked speculation on whether the Tesla CEO is facing threats from Russia for helping Ukraine amid the war.

In February, Mr Musk’s company SpaceX’s Starlink satellite broadband service was activated in Ukraine after a minister from the war-hit country reached out.

The tweet on death under mysterious circumstances met with varied responses, ranging from jokes to caution to solidarity.

Some users asked if Mr Musk was intoxicated, others concluded that it is the huge taxes that is bothering him and some said he needs to live to bring about “reform”.

Mr Musk has been consistently making headlines over the past few months during which he criticised Twitter over the shrinking space for free speech, then opted out of joining its board at the last moment and then announcing its decision to buy it for the whopping sum.

Following the announcement, he has teased radical ideas for the micro-blogging site, including introducing a fee for commercial and government users.



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Tesla Loses $126 Billion Value Amid Musk’s Twitter Deal Funding Concerns

Tesla did not immediately respond to a request for comment. Reuters

Tesla Inc lost $126 billion in value on Tuesday amid investor concerns that Chief Executive Elon Musk may have to sell shares to fund his $21 billion equity contribution to his $44 billion buyout of Twitter Inc.

Tesla is not involved in the Twitter deal, yet its shares have been targeted by speculators after Musk declined to disclose publicly where his cash for the acquisition is coming from. The 12.2% drop in Tesla’s shares on Tuesday equated to a $21 billion drop in the value of his Tesla stake, the same as the $21 billion in cash he committed to the Twitter deal.

Wedbush Securities analyst Daniel Ives said that worries about upcoming stock sales by Musk and the possibility that he is becoming distracted by Twitter weighed on Tesla shares. “This (is) causing a bear festival on the name,” he said.

Tesla did not immediately respond to a request for comment.

To be sure, Tesla’s share plunge came against a challenging backdrop for many technology-related stocks. The Nasdaq closed at its lowest level since December 2020 on Tuesday, as investors worried about slowing global growth and more aggressive rate hikes from the U.S. Federal Reserve.

Twitter’s shares also slid on Tuesday, falling 3.9% to close at $49.68 even though Musk agreed to buy it on Monday for $54.20 per share in cash. The widening spread reflects investor concern that the precipitous decline in Tesla’s shares, from which Musk derives the majority of his $239 billion fortune, could lead the world’s richest person to have second thoughts about the Twitter deal.

“If Tesla’s share price continues to remain in freefall that will jeopardize his financing,” said OANDA senior market analyst Ed Moya.

As part of the Tesla deal, Musk also took out a $12.5 billion margin loan tied to his Tesla stock. He had already borrowed against about half of his Tesla shares.

University of Maryland professor David Kirsch, whose research focuses on innovation and entrepreneurship, said investors started to worry about a “cascade of margin calls” on Musk’s loans.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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