Elon Musk, CEO of Tesla stated on July 8 that he intended to back out of the $44 billion plan to purchase Twitter. Recently he announced that the social media behemoth is seeking to sue him as soon as this week.
The Delaware Court of Chancery, a non-jury trial court that deals with corporation law in the state of Delaware, will hear the lawsuit once the company retains the corporate legal firm Wachtell, Lipton, Rosen & Katz. It’s not yet clear, though, if Musk will ultimately decide to buy the platform, whether at the originally agreed-upon price. Alternatively, he might buy it at a newly negotiated one, or not at all.
Will the Deal Go Through?
Musk attempted to back out of the deal last week. Hence, Twitter Chairman Bret Taylor vowed to take legal action against him. Taylor said the board wants to finalise the acquisition as originally agreed. Moreover, it is prepared to take legal action to enforce the merger agreement. However, some think that Musk’s decision to end the pact could just be another ploy to renegotiate the terms of the expensive contract. On July 8, founder and CEO of Accelerate Financial Julian Klymochko tweeted to his 24,200 followers. According to him, a negotiated settlement is the most likely conclusion.
Musk also has a way out of the agreement. However, doing so will result in a $1 billion “termination fee” that Musk must pay to Twitter, per the original Securities and Exchange Commission filing made on April 25. The crypto community on Twitter mostly disapproved of Musk’s decision to sell his ownership stake in the microblogging site. It backed his efforts to shut down all spam and scam bot accounts.
According to a survey conducted on July 8, 38.8% of participants said that Musk withdrawing his offer would be detrimental to Crypto Twitter because of the rise in spambot activity. 40.4 percent of respondents stated they didn’t care, which is the majority.