Twitter’s Lawsuit Against Elon Musk Gets A Trial Date
The Twitter lawsuit against Elon Musk is going to trial, and things probably don't look great for the Tesla CEO.
It looks like the Twitter lawsuit against Elon Musk is moving forward, whether Musk likes it or not. The trial date has been set for five days in October. Originally, Twitter was seeking a trial in September whereas Musk was hoping for one in February. It appears the court opted in Twitter’s favor, choosing something much closer to their September suggestion. As reported by Deadline, the court agreed that delays could cause harm to Twitter’s business. The trial date was set by Delaware Chancery Court Judge Kathaleen McCormick. She also disagreed with Andrew Rossman, a rep for Musk, who argued that a fall trial was too short of a time frame.
Elon Musk originally offered to buy Twitter in April for $44 billion. The mogul then rengeged on the deal in July, terminating his agreement to purchase the company. Twitter sought legal action to enforce the deal in the following days. Musk cited his reason for terminating the agreement, mentioning his demand that Twitter proves that spam and fake accounts make up less than 5% of their daily active users. Musk even posted a meme in response to the lawsuit, saying that Twitter will now have to reveal its bot statistics in court. As reported by Bloomberg, Twitter will be hiring the law firm Wachtell, Lipton, Rosen & Katz to represent them in this case.
Elon Musk had previously mentioned his issues with the bot accounts on Twitter’s platform, along with several other issues that he wanted to be ironed out. In June, Musk aired some of his greivances during Bloomberg’s Qatar Economic Forum. Musk mentioned the bot statistics, the need for shareholder approval, and the debt portion of the deal during his appearance. The bot account problem remains the crux of this agreement and the biggest point of contention between these two parties.
It will be interesting to see where this legal battle ends up, but it doesn’t seem like things are lining up in Elon Musk’s favor. Twitter has said that they are looking to enforce the deal, so it won’t be too easy for Musk to wiggle out of it. This leaves several scenarios on the table. One part of the agreement mentions that there is a $1 billion breakup fee for the transaction, but only if there is good cause. So, even if Musk is able to prove there’s a good cause for dissolving the agreement, he’s going to have to cough up at least $1 billion to Twitter.
There’s also a chance that Twitter will be able to force Musk to go through with the transaction. It seems unlikely that Musk comes out with a clear victory in this trial. At the very least, it seems like the case might end in a settlement. This would give Twitter more than the $1 billion breakup fee and Musk would get out of paying $44 billion for the social media giant. It’s not exactly a win-win for either party, but settlements usually aren’t. Barring some typically Musk-like social media antics, we probably won’t get too much more on this story until the trial, but we’ll keep you updated.
