Thursday, August 4, 2022

Musk Bought Twitter To Replace And Paying 1 Billion To “Break Up” Isn’t So Easy

Musk, the world’s richest man, tweeted on the morning of the 13th that his proposed 44 billion yuan acquisition was “temporarily put on hold” until the Twitter robot army and fake accounts were really clarified, and Twitter The share price of K fell about 10%. (Reuters)

richest man in the worldmuskbuy social mediaTwitterIn a dramatic turnaround for Twitter Inc., Musk’s tweet this morning was “on hold” to prove that spam and fake accounts counted less than 5% of users; Loyal to Twitter’s takeover stance.

electric vehicle manufacturerTesla(Tesla) CEO and Founder Elon Musk (Tesla) CEO and Founder Elon Musk (Tesla) may have a possible reversal of the rumored $44 billion acquisition of Twitter. Musk’s main source of personal income is Tesla, whose shares have suffered recently. Tesla shares were up $1,145 when Musk announced his acquisition of Twitter, and they closed today at $769.59. Twitter closed today at $40.72, well below Musk’s bid of $54.20.

The New York Times reported today that Musk personally visited Twitter’s San Francisco headquarters on Friday to discuss business strategy and the acquisition process, while Musk was still focused on closing the deal.

The report said that since Musk signed on, if the deal falls through, breakup charges would exceed $1 billion. The contract has a “specific performance clause,” and if Musk’s debt financing for the deal remains intact, Twitter could even go to court to force him to complete the acquisition.

Some performance clauses are court orders, “even if you don’t want to buy it, but because you promised to buy it, you have to pay,” said Brian Quinn, an associate professor at the Boston College Law Institute. It is like signing a contract to buy a house. After buying a house, buying a house seems expensive, and by “requesting a lower price”, the seller will not agree.

Similar past examples include Tyson Foods Inc.’s attempt to pull out of a 2001 acquisition with meat packer IBP, alleging financial problems and accounting irregularities; But a Delaware judge ruled that Tyson Food must complete the acquisition. Typically, in other cases, the buyer pays a large break-up fee to terminate the deal.

Musk may get Twitter on the basis of a reduced price, for this will be paid for by LVMH in the U.S. Similar “material adverse changes” can be traced to the acquisition of jeweler Tiffany & Co, which caused financial losses due to the pandemic. In the end, LVMH completed the transaction with fewer purchases. cost.

The report analyzed that the extent of “adverse change” is too high. Musk’s takeover of Twitter is happening quickly, and on-site inspections are limited. It is difficult to find a sympathetic judge; In addition, Musk previously told investors that he believed he could double Twitter’s revenue.

Much has changed in Musk’s purchase of Twitter in just a week, and challenges have emerged within Twitter. CEO Parag Agarwal said on 12th that two senior executives were gone, but both of these forest executives tweeted that they were “fired”. Yagravo also announced that since Twitter hasn’t achieved growth in viewership and revenue, it is currently hiring new employees and slashing spending.

musk twitter tesla

Of earlier

China is no problem without Disney and the Chinese market is completely broken?


US women’s basketball star arrested for possession of marijuana oil, Moscow court extends pre-trial detention

We .

Related Articles

Latest Articles