Twitter vs. Musk: chronology of what promises to be one of the biggest lawsuits on Wall Street

First modification: 07/13/2022 – 19:29

It began as a novel of love and hate in April 2022, but it still does not have an estimated closing date, nor does it guarantee a happy ending. Of course, it promises to captivate the public’s attention from the best stage: a business court.

The announcement of the purchase of 9% of the shares of the social network Twitter on the New York Stock Exchange by Elon Musk, on April 4, coincided with a survey of his on the same social network. The “yes” swept the question of whether users wanted an edit button.

That same day, the company’s shares soared 31%, hours before its board of directors invited the tycoon to join it, a charge he rejected.

This and other moves paved the way for the electric vehicle and space travel tycoon to announce on April 14 that he had introduced an offer for around 44,000 million dollars to keep 100% of the company.

The offered price of 54.2 dollars per share represented a not insignificant premium over the 45.08 dollars that the title cost at that time. It is also almost 50% higher than this Wednesday’s trading price.

What seemed like an amicable agreement had setbacks from the start. A day after receiving the offer from Musk, the board of directors adopted what is known on Wall Street as a ‘poison pill’, a common way to defend against a “hostile takeover” and the prelude to what would be a path full of thorns. towards the closing of the transaction.

On several occasions, Elon Musk has confessed incredulity of the figures that Twitter provides on spam or fake users, also known as ‘bots’, which account for no more than 5% of the total. That earned him to doubt the convenience of continuing with the business.

The turning point came on May 13, when the American businessman decided to “pause” the pact, which days later would lead a group of shareholders to sue him for stock manipulation.

Two frantic months exposed the disagreement of the parties, which went to the legal plane when, after Musk decided to withdraw from the agreement definitively on July 8, the social media platform took the matter to a Delaware court to demand that he comply with it.

In a 62-page documentTwitter’s lawyers provided evidence ranging from text messages to screenshots of the billionaire’s tweets in which he “mocks” the business.

There they point out that, for Musk, apparently, both Twitter, as well as its shareholders, the agreed transaction, and the judicial process, constitute nothing more than a true “elaborated joke”.

What for Elon Musk represented the end of his project, for Twitter is just the beginning of a long legal battle, which promises to become the largest in the recent history of Wall Street.

With Reuters and AP