Correspondent in Washington, D.C.
Elon Musk chose to turn around again rather than risk a lawsuit. The unpredictable industry is finally choosing to follow through on its April promise to buy Twitter for $44 billion. The price of $54.20 per share of Twitter, which was accepted by Elon Musk in April, should be respected. The surprise sent the group’s share price jumping 22% on the Nasdaq on Tuesday. Twitter’s price, up to $52, now reflects the long-skeptical market’s belief that the initial deal will happen.
Lawyers for both sides are negotiating the terms of an agreement that would avoid a trial that was scheduled to begin Oct. 17 in Delaware’s top court, which specializes in corporate takeover disputes. It was before this body, known for its quick decisions and its very unfavorable jurisprudence to business acquirers who change their minds, that Twitter pulled Elon Musk in July to force him to honor his costly commitment. In the last days, in the preliminary stage of the trial, Judge Kathleen McCormick had already made a decision several times in favor of Twitter’s lawyers on various procedural points.
The burden of proof for Elon Musk was very high. He first had to show that Twitter deliberately overestimated the number of human users of its platform. He then had to prove that this deception had a sufficiently material material effect on the company’s valuation to invalidate the terms of the acquisition. However, according to Twitter’s lawyers, the two experts hired by Musk to estimate the proportion of fake accounts opened on the social network, drew conclusions insufficient to confirm the deception. It could be judged that 5.3% of the accounts are fake. Another would set the bar at 11%. Twitter, for its part, always claims that less than 5% of its users are actually robots.
The uncertain future of Twitter
If Elon Musk does become the owner of Twitter, at the high price that was initially agreed upon, then the management of the Californian group will win a strange victory. For months, Elon Musk has been fiercely critical of his leadership, the way it protects Twitter’s privacy, tweet censorship standards, and its reliance on advertising revenue. It’s hard to see how Parag Agrawal, head of the San Francisco firm, can stay put.
The Twitter plans of the billionaire, who is already the head and founder of the Tesla car manufacturer and SpaceX company, are not so clear. While the chain’s financial results have been disappointing, to the point where the company posted losses in the second quarter, the morale of its teams has been greatly affected by the dispute between its acquirer and incumbent executives. Twitter is popular in the world of media and politics, but only has an average of 238 million monetized daily active users, which remains marginal compared to Facebook’s 2 billion daily users.
Before going back on his shopping spree, Elon Musk has announced plans to more than double Twitter’s user base by 2025. The whimsical liberal, who likes to express himself on all topics and has 107 million fans online, wants to: create twitter”World Free Speech Forum“. It was on this platform that he offered the sketch on Monday “peace planbetween Russia and Ukraine… before criticizing President Zelensky, while, on the contrary, the Kremlin characterized the initiative as “very positive“.
The industry captain also criticized Donald Trump’s ban on tweets since January 8. He argued for a subscription-based business model. He is also considering offering money transfer services to Twitter users. Elon Musk is known for his innovative audacity, but to date he has not presented a recovery plan for the company he plans to buy at a high price.
Source: Le Figaro
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.