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Twitter said to hire law firm to sue Musk over deal termination

Jul. 10, 2022 3:04 PM ETTwitter, Inc. (TWTR) StockTSLABy: Joshua Fineman, SA News Editor572 Comments

Elon Musk To Buy Twitter

Scott Olson

  • Twitter Inc. (NYSE:TWTR) is said to have hired law firm Wachtell, Lipton, Rosen & Katz LLP as it prepares to sue billionaire Tesla (TSLA) CEO Elon Musk over his termination of the $44 billion deal.
  • Twitter (TWTR

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Comments (572)

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Reading is never enough profile picture
I don’t know what a court will decide.
But I know that Elon is not going to walk away easily.the reason is simple.
He tweets a lot when he is high.
And he doesn’t listen to his attorneys.
He has damaged the reputation of Twitter.
Be certain I am not with Twitter board side.actually I was with elons.
But he did too many mistakes and he won’t be able to get out of them.
The law is very specific.
Elon demanded and most possibly was given data that were not to be given is he wasn’t going to buy it.
Huge mistake.
And most possibly because of specific mistakes he did he will have to buy Twitter in the agreed price.
And the banks will put someone else CEO.
And Tesla shares will end to the hands of the bankers.
Certainly I don’t like the idea.
But that’s what will happen.
Elon start acting more efficiently towards your shareholders.
Tesla and Twitters shareholders have given you all this wealth and power.
Trust me if they see your dark side and find a new Messiah you will be in deep trouble.
The power belongs to them.
Elon has only one ace.
Twitter never wanted to be sold to elon.
Actually they wanted this golden goose for them.
Doing nothing and being paid with enormous amounts.
If he stops the drama he is creating and his bad habits maybe just maybe his attorneys will save him.
But with a lot of injuries and he will experience defeat..
tea leaves profile picture
@reading is never enough "he has damaged the reputation of Twitter".... or Twitter has damaged its own reputation by censorship of those they disagree with and Elon has highlighted that fact?!?!

He isn't going to buy it and if he does it will be for far less. They are a Bot farm and any purchaser deserves to know how many ACTUAL USERS there are prior to purchase. Back in the day we use to call this due diligence.
@tea leaves
back then when you wave due diligence, you bought it as is. he also stated the whole reason to buy them was due to the bot issue, so to claim that as an issue is illogical.
PayNoAttention profile picture
@tea leaves Thanks for this. I was wondering what happened to all the Musketeers insisting he was playing 14 dimensional chess and not just a rich boob who stepped in a deep pile of manure for no good reason.

And now I know. Is everyone else in denial and recycling months old arguments that time has already proved wrong? Or are you the last one in that bunker?

Anyway, thanks for the rerun. Watching boot licking toadies trying to make an argument was the best part of this massive cluster f of a deal. I look forward to your insistence he “won’t buy it” for years after the deal closes in a few weeks.
Twitter should have sold Musk an NFT for the company and this would now be a non-issue....
georgefelix75 profile picture
Where does it state that Musk waived due diligence? Anyone have this data?
MillionsDollarMan profile picture
@georgefelix75 He didn't waive due diligence. He still has the right to request and review information. Everyone believes he signed the agreement that he waived DD. There were conditions to close. Twitter claims there is no material event to spoil the deal. What else would they say. There are a lot of Musk haters spewing falsehoods.
georgefelix75 profile picture
@MillionsDollarMan it’s been widely reported that he waived it. I thought someone had pulled the language from the agreement docs. I’m on a phone so kinda hard to read 150 pages of fine print.

Btw, the musk haters are relatively new. I think people finally got tired of his shenanigans and entitled ways. It was sorta cute when he was toying with the SEC but he took that too far as well. It appears he doesn’t think any of societies rules or conventions apply to him.
JunkBondage profile picture
@georgefelix75 Read the complaint filed by Twitter - it’s all laid out in 62 easy to read (damning, really) pages, plus it was all over the news. He definitely waived due diligence, the deal was not conditioned on due diligence: s3.documentcloud.org/...
User46126116 profile picture
After reading the comments here, it strikes me that a large proportion of the commenters should really limit their investing to index funds.
@User46126116 Index funds? I think you're being generous. I was thinking treasury bills.
@Julian Beatty I was thinking my mattress, rofl.
@kata My mattress looks better and better.
tea leaves profile picture
So TWTR's board, who didn't want to Sell to Elon, has hired a law firm to sue Elon to force him to Buy them, which he doesn't want to do because they won't release the BOT numbers, yet when they go to court TWTR board will have to release the BOT numbers.

sounds like a heck of a deal
@tea leaves
who says? that has nothing to do with anything. it is something you elon fans have jumped on because that is the garbage he is spewing.
@eugene_ That number is reported on the 10k. It has a lot to do with something.
MillionsDollarMan profile picture
@WillLong Musk will prove that fake accounts are at least 20%. For every 1 fake account Twitter deletes, there are 20 that get buy. Twitter's platform allows bots to run on it. Musk knows that the bots on Twitter are more than 5%. He is very smart and savvy. He will buy Twitter at a large discount and clean it up privately.
Who Dat? profile picture
Did TSLA drop today because of the TWTR news, or was it because NHSTA investigating other Tesla crashes? Hmm? All these headwinds for Tesla. What a shame! Tsk tsk!

U.S. agency to open probe into fatal Florida Tesla crash

MillionsDollarMan profile picture
@Who Dat? This is what happens when people from California come to Florida.
Who Dat? profile picture
This is what happens when seniors rely on high tech gizmos thinking their Tesla can save them from accidents. Oops!

Have you ever seen an old lady driving and texting at the same? Scary shit! She was driving half the speed limit while driving and texting!
coffeebreak profile picture
@MillionsDollarMan the interesting thing is what happens when people from Florida come to California.
Lets make this clear . Not one of you is smarter then Musk. He can pay the one billion and screw the deal. I trust Musk s word over those liberals at Twitter that have shown to cancel info that they dont want u to know
JunkBondage profile picture
@stevewin This isn't about liberals or conservatives. I don't give a toss about the politics of TWTR. Musk isn't that smart, at least in how he handled this whole deal. He signed a binding contract to buy a company for $44 billion without doing any due diligence or making the deal conditioned on any due diligence. Most people who know this stuff would stay that's stupid, including me.

He signed a contract with a specific performance provision. He will not get away with a simple $1 billion payment. He is literally on the hook to complete the deal (the term 'specific performance' is the clue). That's the reason TWTR hired the best M&A lawyers in the country. To force Elon to do what he promised in writing. One of TWTR's lawyers is former DE Chancery Court Judge and Chief Supreme Court Judge Leo Strine. There is no one better qualified to take Elon to the cleaners.

All that may be the case but how does that get the Board off the hook from a Shareholder lawsuit claiming failure to disclose requested info to close the deal torpedoed the deal and damaged shareholders? The successful completion of a suit against Musk in a few years doesn't do it.
JunkBondage profile picture
@kata TWTR has provided Musk with their "firehose" of data. Maybe he and his advisors are really not qualified to evaluate that data. Why do you assume that TWTR failed to disclose requested data? There's been absolutely no proof or evidence of that, or any evidence that the 5% figure is incorrect.

This lawsuit will not take "a few years". There is plenty of legal precedent for merger lawsuits in Delaware. This will be resolved in months, not years. Probably in early 2023, at the latest.
Great news . The 2 law firms just hit the lottery.
FXMT profile picture
@stevewin haha. True. They'll make a lucrative stream of revenue from both sides.
Who Dat? profile picture
The true winners are the short sellers. Sit back and watch them duke it out. Eventually, TSLA shareholders will sue Elon and Tesla when their stock craters.

Bill Gates is laughing at Elon... Jim Chanos wants some too!

@FXMT The loser will pay attorney's fees. Odds are pretty good its Musk writing the checks for both sides.
Seriol profile picture
P.70 of the agreement, the specific performance clause:

"...hereby acknowledged and agreed that the Company shall be entitled to specific performance... to consummate the Closing if and for so long as... (ii) the Debt Financing (or, as applicable, the Alternative Financing) has been funded or will be funded at the Closing if the Equity Financing is funded at the Closing..."

Seems like an awfully big out. Musk simply doesn't have the funding lined up and the specific performance doesn't apply? Legal eagles, is this a correct read?
@Seriol He certainly can sell enough stock, as Alternate Financing, to cover the $44 billion price, so I don't see how it is a "big out".
MillionsDollarMan profile picture
@julianbook he’s not finding the buyout entirely. I would back out in this deal. This deal is dead.
JunkBondage profile picture
@Seriol MUsk gave an equity commitment letter, so it’s not an easy out. A judge could rule he’s in breach and force him to comply with the contract. Twitter and it’s lawyers know who they were dealing with so he had to make representations and warranties that he would fund the equity commitment. The dela is not conditioned upon financing, so a lack of financing is not an out. If the banks pull financing that’s a different story, but they’d need a very strong basis for doing so. When Apollo’s banks pulled financing for its acquisition of Huntman in 2008, the banks ended up paying a huge penalty for not funding. Something like $1 billion (on a much smaller deal than TWTR). Huntsman was actually near bankruptcy at the time (unlike TWTR) so that $1billion award actually saved them from filing.
Who Dat? profile picture

If you own TWTR shares or work for TWTR, you should be standing outside of Tesla store(s) and protest day and night until Tesla's revenues craters. Get the message out!

Give Elon a taste of his own medicine. Afterall, you'll be "saving democracy".
@Who Dat?

And why wouldn't Twitter shareholders sue the Board for breaching a contract that would have given them much higher value for their shares? Class action status as well. Even treble damages if there was fraud. Looks like this doesn't end well for Twitters shareholders if Musk walks away.
@Who Dat? Yea how about getting a job and this is really going to stop people from buying a tesla.
Made absolutely no sense for TSLA to trade up after TWTR fiasco announcement Friday with Musk simply in the process of burning down his cute little car company.
Reading is never enough profile picture
Sold my Tesla just now.I was a believer that Elon will keep his word.as my father said a man that doesn’t follow his own words should be avoided.
Sell Tesla higher.make money out of him as he made money out of you.don’t be too greedy because he may sell first.
Many people will try to persuade you that now Tesla I’ds going higher because he will not buy Twitter.trust. One thing:layers will make a lot of money.
Elon will not win.
But as many will believe in this nonsense make money and sell higher.as for me ,I will buy Berkshire in a lower price.I don’t want this drama.I want to trust.
And I don’t trust Elon any more.
I thought he would never prove to be what his haters think.
But he did.
Don’t be a hater.
Just sell in a higher price and make money.
tea leaves profile picture
@Reading is never enough my father always said, "cut your losers early and let your winners run." Good for Elon, he just saved a bundle.

You Mad bro.
Reading is never enough profile picture
@tea leaves.I dislike Twitters board.don’t be mistaken.i believed at Elon that he would accomplish his tasks because he was a narcissist and he would be a success with Tesla.
And l didn’t mind that he wasn’t on schedule with cybertruck .because I thought he wanted to make the best.
And I bought Twitter and didn’t sell and make money because I believed him.huge mistake.I never write my opinion,so can benefit from others.I only wrote my opinion to protect.
I like older people than me and I respect they know better out of experience.i prefer buffet.he keeps his word.
I don’t like Cathy woods because she pumped Tesla and the very next day she sold.I didn’t like she used people.
So I have to think the same about Elon.
But my advice is sell higher than me .because I don’t want drama ,I will take my gain and get out.and be happy you gained more than me.
I sold at 759 pre market.and not buying again ,not even at 500$.
But I know that he has his followers as I used to be one.so make money.
After the law firms each get a billion, there will be a settlement.
Twitter should sue Elon for Child Support. Elon screwed Twitter and then left it to fend for itself.

I see a pattern.
JunkBondage profile picture
@ding dong With nine kids, folks say this is the first time Elon actually pulled out of anything.
"Elon actually pulled out of something."

Elon always pulls out, but only after its too late. And without protection by waiving diligence. Again I see a pattern.
Fangorn profile picture
@ding dong He didnt wave due diligence. He perused the security filings(which seemingly do not actually give a true and fair picture of the company)
Lots of commenters seem to know how this will turn out. Well. You don’t.
What is going on behind the scenes will make this case have many twists and a surprise ending.
User46126116 profile picture
Oooooooh. As surprise ending. Just like a TV show. How exciting.

Or not.
And Value for All profile picture
I'd recommend Schweikart & Cokely LLP, they have a good track record for settling at favorable terms. They have more experience with healthcare REITs but its ok. Steer clear instead of Hamlin Hamlin & McGill LLP.
@And Value for All i am sure elon will be calling u soon
@And Value for All

Based on your advice I hope they have Saul's phone number :-)
timucin2 profile picture
Twitter is not managed well that is a fact. It is probably the best social media app to date that will survive even when the facebooks instagrams and tiktoks will disappear into thin air. Elon was right in going for the company but it appears that his team has failed big time in carrying out the due diligence.
Gruss_Gott profile picture
@timucin2 " it appears that his team has failed big time in carrying out the due diligence."

That probably has something to do with Elon explicitly saying there wouldn't be any due diligence and just impulsively signing a pretty airtight purchase agreement.

Just saying that was probably a factor.
@Gruss_Gott how did you obtain the agreement?
User46126116 profile picture
@nicholas__t01 Probably how everyone else did. SEC filings.

Twitter has to play hardball, or Musk will succeeed in thrashing and slandering the company, causing the stock to melt down and threatening its survival. First move would be to cancel his account, based on the SEC having found it to be used by Musk for stock price manipulation.
Et20 profile picture

He lost interest in the cesspool of misery and activism that is Twitter.
@julianbook Actually they should. Twitter can block anyone's account. Why not block someone who is actively costing them money.
@julianbook Short stock manipulation is done every day…truth is an absolute defense. One reason why there are very few lawsuits against short sellers.
seeking.theta profile picture
Let's see just how long Elron remains above the law.
rbrianh profile picture
Twitter is a joke! What company that wanted to make money would exclude a former President and his followers from their platform? What kind of idiotic business plan is that. Now they won’t provide the information Musk needs to make a decision. These people are idiots.
seeking.theta profile picture
@rbrianh Elron didn't need any information to make his decision, he signed a binding agreement to buy Twitter without it, his decision was already made. He's trying to reneg on it because he can't afford it anymore.

They "exclude" people who violate their terms of service. The only joke here is you for pretending that you are smarter than the Twitter board.
Plan Man profile picture
@rbrianh twitter woild be crazy to start handing over private info.
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