The billionaire father of 10 children (that we know of) has pulled out…of the Twitter deal, that is!
So, what happens now?
Well, Twitter is being quite upfront about it: The company plans to take Elon Musk’s ass to court.
In — what else — a tweet, Salesforce co-CEO and Twitter board member Bret Taylor released a statement saying the social media company plans on suing Musk to force him to uphold his end of the Twitter buyout.
“The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement,” Taylor posted on Friday, shortly after news broke via a statement that Musk filed with the U.S. Securities & Exchange Commission (SEC) saying he no longer planned on purchasing the social network.
“We are confident we will prevail in the Delaware Court of Chancery,” Taylor continued.
And what can the court do? Well, a judge can very well order Elon Musk to abide by the terms he agreed to and force the Tesla CEO to buy Twitter for $44 billion. There were also terms in the Twitter deal that Musk agreed to that would result in him paying $1 billion to Twitter if he backed out of the deal. However, there were exceptions to that fee, which Musk is sourcing as his reason for terminating the deal and why he actually now owes Twitter nothing.
Musk started to balk at closing the deal just shortly after it was announced in April. He eventually announced he was putting the deal “on hold.” He pointed to Twitter’s bot problem, the number of fake accounts on the platform, and Twitter misrepresenting just how big of an issue it was as his reasoning for the termination. However, Musk appears to have known about the bot issue as the Tesla CEO himself had previously tweeted about his plans to tackle the problem. And, just last month, the feud over bots went public when Musk shared that he requested additional data from Twitter in order to take a deeper look at the issue but the company refused. Twitter quickly called his bluff and gave Musk access to the data he had wanted, including the full “firehose” of the platform’s data.
Another reason for Musk to try to wriggle his way out of the deal? Since he agreed to buy Twitter, the stock market has crashed, de-valuing the social media company’s stock which he had agreed to buy at $54.20 a share. At the close of market on Friday, Twitter was trading at $36 a share.
As Mashable’s Mike Pearl points out, regardless of what happens, Elon Musk still owns a large chunk of Twitter, the publicly-traded company. He just no longer wants to pay to own it outright and make it his own private company.
But, like it or not, Elon Musk — who has lost billions of dollars himself in recent months due to the market downturn — may find himself forced to pay up and buy the bird site.