[Update] Twitter Versus Elon Musk Trial Held October 2022
A judge in Delaware, United States, has set a trial between Twitter and Elon Musk to be held in October. Chancellor Kathaleen McCormick of the Court of Chancery in Delaware said Twitter deserved a quick decision after Musk withdrew from the acquisition deal.
“The reality is that adjournment of hearings could threaten irreparable harm to the [Twitter] company,” McCormick said.
The judge’s order is a blow to Musk — who previously pushed for a trial in February next year — to allow an extensive investigation into his claims that Twitter had misrepresented the number of fake or spam accounts.
On the other hand, Twitter had asked for the trial to be held sooner, to be exact in September. Twitter assesses the postponement of the trial until next year could threaten financially.
Twitter is taking legal action after Tesla CEO Elon Musk tried to cancel an offer related to a $44 billion purchase of Twitter. In a letter sent to Musk and submitted to regulators, Twitter said it had not violated any obligations under the merger agreement.
In a document, Mike Ringler — Musk’s attorney — said Twitter had not fulfilled its contractual obligations, including providing information about fake accounts and bots.
“Twitter has failed or refused to provide information. Sometimes Twitter ignores Musk’s requests, sometimes rejects them for seemingly unjustifiable reasons, and sometimes claims to comply while providing information that is incomplete or unusable by Musk,” wrote Mike Ringler of Skadden, Arps, Slate, Meagher & Flom LLP. Monday (11/7).
Responding to this, the board at Twitter is committed to closing the transaction according to the price and terms previously agreed with Elon Musk.
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. We are confident we will prevail in the Delaware Court of Chancery.
— Bret Taylor (@btaylor) July 8, 2022
Twitter Independent Board Chair Bret Taylor said Twitter plans to take legal action to enforce the agreement.
Recently, Twitter released a dataset including more than 500 million tweets posted daily to allow greater access for other developers. WashingtonPost sources said information and data about fake accounts on the Twitter platform would be handed over to Musk later that week.
On Monday (6/6), Musk’s attorney sent a letter to Twitter. He emphasized the importance of data streams to find out the number of fake accounts that are directly related to the company’s advertising revenue.
Musk has threatened to drop his bid to buy Twitter if the social networking company doesn’t provide fake account data
Through his attorney, Musk also threatened to cancel the offer to buy Twitter if the social networking company did not provide fake account data. Musk said Twitter had materially violated the merger agreement in a document he filed with securities regulators.
Musk since mid-May 2022 began to raise concerns about fake accounts circulating on Twitter. He even hinted that he wanted to acquire Twitter at a lower price than the initial offer submitted last April worth US$44 billion or equivalent to Rp634 trillion.
Quoting Bloomberg, at the All-in Summit conference in Miami, United States, Musk said a deal with a lower price was very likely.
“You can’t pay the same price for something much worse than what they (Twitter) claim,” Musk said at a conference in Miami.
Elon Musk finally postponed the purchase of Twitter because he considered that there were many fake accounts and bots on the platform. Musk suspects the number is at least 20 percent of fake accounts and bots. On the other hand, Twitter in its quarter I/2022 report revealed that the number of fake accounts on the platform did not reach 5 percent of daily and monthly active users.
Musk awaits details of the fake account count from Twitter and plans to deploy his team to conduct a check by taking a random sample of 100 accounts.
Musk’s acquisition deal has been approved by Twitter’s board of directors. The process is expected to be completed this year. Elon Musk will make this social media company a private company after officially becoming full control.
From Reuters news on (26/4), Twitter revealed that Musk obtained a debt and margin loan facility of US$25.5 billion (about Rp367 trillion) to acquire Twitter. The rest, Musk provides equity commitments worth US $ 21 billion or equivalent to Rp. 302 trillion.