Tag: Twitter Inc

To buy Twitter, Musk has to keep banks, investors on board

If the squabbling ever stops over Elon Musk’s renewed bid to buy Twitter, experts say he still faces a huge obstacle to closing the $44 billion deal: Keeping his financing in place.

Earlier this week, Musk reversed course and said he’d go through with acquiring the social media company under the same terms he agreed to in April. But after months of tweetstorms and legal barbs, there are scars and suspicions on both sides.

Experts say that behind the scenes, banks could be scrambling to find buyers for $12.5 billion in debt from the deal, and Musk is trying to hold together a group of equity investors that is pitching in billions more. The erratic billionaire is on the hook for the rest.

The fighting continued Thursday, when Musk’s attorneys said Twitter is refusing to accept his revived bid to buy the company. They sought to delay an upcoming trial on Twitter’s lawsuit that could force him to complete the deal.

But Twitter’s attorneys said it’s Musk who is holding everything up, and his effort to put the trial on hold “is an invitation to further mischief and delay.”

In the end, a judge agreed to give Musk more time to close the deal but said the trial will go ahead in November if he doesn’t.

It’s still possible the sale could close. But with so much at play, here’s what could throw the deal off track, again:

BANK FINANCING

A group of banks, including Morgan Stanley and Bank of America, signed on to loan $12.5 billion of the money Musk needs for the deal. In Thursday’s court motion, Musk alleges that Twitter doesn’t want to set the lawsuit aside because of a “baseless” fear that Musk could fail to get the bank financing.

“No such failure has occurred to date,” the motion said. “Counsel for the debt financing parties has advised that each of their clients is prepared to honor its obligations.”

The banks are “essentially cemented” to the deal by solid contracts, Wedbush analyst Dan Ives said. But the debt market has changed dramatically since April. The stock market has tumbled, inflation is high, and interest rates are up as the Federal Reserve tries to slow the economy.

Banks would sell the debt to institutional investors, but there’s not much appetite now to take part in takeovers that saddle companies with big debts. Banks could be on the hook to make loans themselves.

“The banks would be really happy to not to have to take the risk of funding these loans,” said Erik Gordon, a law and business professor at the University of Michigan. “The agreements seem to be very strong, but I think the banks have their lawyers pulling all-nighters trying to get them out of it if they can.”

EQUITY INVESTORS

Investors who would get equity in Twitter are supposed to kick in billions. Ives estimates they had agreed to $15 billion to $16 billion. But some investors may be skittish about staying in given the market changes and Musk’s repeated accusations against Twitter about the number of bots on the platform.

Qatar’s sovereign wealth fund declined comment this week on the $375 million its subsidiary pledged in May. Several other investors didn’t respond to requests for comment on whether they were still chipping in.

Musk’s equity commitments — including $1 billion from Musk’s friend and Oracle co-founder Larry Ellison — are on shakier ground if any in that diverse group of backers have changed their minds, said Kevin Kaiser, an adjunct finance professor at the University of Pennsylvania’s Wharton School.

“Nobody knows — I don’t know anyway — what their commitment is,” Kaiser said. “So are they able to back out? Because if they’re able to back out, he is on the hook.”

MUSK MONEY

Musk, the world’s richest person with a net worth of $231 billion according to Forbes, has to kick in his own money, but just how much depends on how many equity investors stay in.

Most of his wealth is tied up in stock of the electric car company that he runs, Tesla Inc. Since April, he has sold more than $15 billion worth of Tesla stock, presumably to pay his share.

If any equity investors drop out, though, Musk will either have to replace them or throw in more money, fueling speculation that he might have to sell more Tesla shares. Musk’s share of the original deal was about $15.5 billion, Ives estimated.

THE GUARANTEE

It’s clear that Twitter’s board is very suspect of Musk because he has trashed the company for months now, alleging that it has far fewer daily users than it reports to investors, said Gordon.

That has diminished Twitter’s value and made investing in the deal less attractive, he says. And because Musk already tried to back out of the deal once, Twitter will want a guarantee of some sort that he won’t back out again.

That, Ives said, is likely to be a large chunk of money held in a non-refundable escrow account that would go to Twitter if Musk doesn’t deliver.

SIGNS OF PROGRESS

There are some signs that the deal will yet go through. Twitter says it looks forward to closing the deal by Oct. 28. Musk’s deposition in the lawsuit, scheduled for Thursday in Austin, Texas, was postponed. Musk’s motion says the bankers are still in. And the original group of investors is not talking publicly about bailing out.

———

Krisher reported from Detroit, O’Brien from Providence, Rhode Island.

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October 7, 2022
Twitter under Musk? Most of the plans are a mystery

SAN FRANCISCO (AP) — A super app called X? A bot-free free speech haven? These are some of Elon Musk’s mysterious plans for Twitter, now that he may be buying the company after all.

After months of squabbling over the fate of their bombshell $44 billion deal, the billionaire and the bird app are essentially back to square one — if a bit worse for wear as trust and goodwill has seemed to erode on both sides.

Musk, the CEO of Tesla Motors and SpaceX and Twitter’s most high-profile user since former President Donald Trump was booted from it, has shared few concrete details about his plans for the social media platform. While he’s touted free speech and derided spam bots since agreeing to buy the company in April, what he actually wants to do about either is shrouded in mystery.

He could own one of the world’s most powerful communications platforms with 237 million daily users in a matter of weeks, though the deal is not final. The lack of clear plans for the platform are raising concern among Twitter’s constituencies, ranging from users in conflict regions where it offers an information lifeline to the company’s own employees.

“Both users and advertisers are — understandably — anxious about whether the move will fundamentally change the culture of the platform,” said Brooke Erin Duffy, a professor at Cornell University who studies social media. “And so, Musk will need to decide whether he wants to quash their concerns by retaining core features (the content moderation system, for instance) and keeping the company public — or whether he will undertake a full-scale overhaul.”

Muddling things further, on Tuesday Musk tweeted that “Buying Twitter is an accelerant to creating X, the everything app,” without further explanation.

Although Musk’s tweets and statements have been cryptic, technology analysts have speculated that Musk wants to re-create a version of China’s WeChat app that can do video chats, messaging, streaming, scan bar codes and make payments.

He gave a little more detail during Tesla’s annual shareholder meeting in August, telling the crowd at a factory near Austin, Texas, that he uses Twitter frequently and knows the product well. “I think I’ve got a good sense of where to point the engineering team with Twitter to make it radically better,” he said.

Handling payments for goods could be a key part of the app. Musk said he has a “grander vision” for what X.com, an online bank he started early in his career that eventually became part of PayPal, could have been.

“Obviously that could be started from scratch, but I think Twitter would help accelerate that by three-to-five years,” Musk said at the August meeting. “So it’s kind of something that I thought would be quite useful for a long time. I know what to do.”

For now, Twitter has immediate and pressing problems Musk will need to deal with if he takes ownership of the company. Its social media rivals are struggling with declining stock prices and some, like Snap, even announced layoffs. Government regulation and attracting younger users away from TikTok are also challenges. And Musk’s vision of a free speech haven has social media and content moderation experts, as well as digital and human rights advocates, concerned.

“When this all started in the spring, we had indicators and a strong sense of what Musk might do with the platform,” said Angelo Carusone of Media Matters, a watchdog group that opposes the takeover. “Because of the lawsuit, we know who he’s been talking to, what he’s been saying and the types of far-right ideological decision makers he wants to put in place. To put it bluntly, the worst fears have been confirmed.”

Twitter employees, under former CEO Jack Dorsey and his predecessors, have spent years working to tame the platform once called the “free-speech wing of the free-speech party” where hate and harassment abound into something where all are welcome and safe. While it’s far from perfect, critics worry Musk’s ownership will mean turning back the clock on years of this work.

“Musk made it clear that he would roll back Twitter’s community standards and safety guidelines, reinstate Donald Trump along with scores of other accounts suspended for violence and abuse, and open the floodgates of disinformation,” Carusone said.

The company, for instance, was an early adopter of the “report abuse” button in 2013, after U.K. member of parliament Stella Creasy received a barrage of rape and death threats on the platform, echoing the experiences of other women over the years.

In subsequent years, Twitter continued to craft rules and invest in staff and technology to detect violent threats, harassment and misinformation that violates its policies. After evidence emerged that Russia used their platforms to try to interfere with the 2016 U.S. presidential election, social media companies also stepped up their efforts against political misinformation.

The big question now is how far Musk, who describes himself as a “free-speech absolutist,” wants to ratchet back these systems — and whether users and advertisers will stick around if he does.

Aiming to tamp down such worries, Musk said in May he wants Twitter to be “as broadly inclusive as possible ” where ideally, most of America is on it and talking — a far cry from the far-right playground his critics are warning against.

And while Musk has hinted he’d consider reinstating Trump’s account, it’s not clear the former president, who has since launched his own social media platform, would return.

Then there’s the matter of Twitter’s employees, who’ve been living with uncertainty, high- (and low-) profile departures and a potential owner who’s publicly derided them on their own platform. Musk has also targeted Twitter’s work-from home policy, having once called for the company’s headquarters to be turned into a “homeless shelter” because, he said, so few employees actually worked there.

As a hyper-frequent Twitter user with over 100 million followers, Musk does know how to use the platform. During an all-hands staff meeting Musk attended in June, he said his goal was to make it “so compelling that you can’t live without it.” If he’s able to realize this, it could finally put Twitter in the big leagues of social media, with TikTok and Meta’s Facebook and Instagram, where users are counted in the billions, not mere millions.

Of course, Musk is also well known for predictions that are delayed or may not come true, such as colonizing Mars or deploying a fleet of autonomous robotaxis.

“This is not a car manufacturer where, good enough, all you have to do is beat General Motors. Sorry, that isn’t really that hard,” said David Kirsch, a professor of strategy and entrepreneurship at the University of Maryland who’s studied Twitter bots’ effect on Tesla’s stock price. “You are dealing here with all of these other companies (that) also have very sophisticated AI programs, very sophisticated PhD programmers…everyone is trying to crack this nut.”

—

Krisher reported from Detroit.

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October 6, 2022
EXPLAINER: Musk Twitter turnaround reflects legal challenges

WASHINGTON (AP) — Elon Musk’s sudden about face on a $44 billion agreement to acquire Twitter, reversing an earlier attempt to rescind that offer, came as a surprise even from the mercurial billionaire who loves to shock.

It sent shares of the social media platform soaring Tuesday and stoked alarm among some media watchdogs and civil rights groups about what kind of free speech will flourish on Twitter under Musk.

Yet the legal challenges faced by Musk in the three months since he announced that he intended to back out of the deal continued to mount, increasingly closing off avenues of escape for the Tesla CEO.

Gambles, missteps, and potential reprieves that failed to pan out, weakened an already dicey case for withdrawal. And then there is the potentially embarrassing deposition scheduled for Thursday and what most considered a long-shot chance for reprieve before a Chancery Court in Delaware in less than two weeks.

Musk said he’ll only agree to continue willingly with the acquisition if that trial is put on hold.

Here’s a look at how the legal battle unfolded:

What was Musk’s main argument for backing out of buying Twitter?

Musk grounded his argument largely on the allegation that Twitter vastly misrepresented how it measures the magnitude of “spam bot” accounts, a discrepancy that could diminish the money advertisers are willing to pay to appear on the platform.

But he faced a difficult challenge in making that case to Chancellor Kathaleen St. Jude McCormick, the court’s head judge. The judge was widely expected to focus narrowly in line with the court’s mandate: on the merger agreement between Musk and Twitter, and whether anything had changed since it was signed in April that would justify terminating the deal. She also made clear she wanted to proceed with the case swiftly, and several times denied Musk’s attempts to delay it and keep bringing in new evidence.

A former Twitter head of security, fired early this year and turned whistleblower, appeared to bolster Musk’s argument. Peiter “Mudge” Zatko, a respected cybersecurity expert, filed complaints in July with federal regulators and the Justice Department alleging that Twitter misled regulators about its efforts to control millions of spam accounts as well as its cyber defenses.

Yet any hope that Musk’s case would be bolstered by Zatko’s disclosures was a “longshot,” said Brian Quinn, a professor at Boston College Law School, and in the end, “it didn’t really change the (legal) landscape in any significant way.”

Did Musk’s approach to buying Twitter hurt or help his case?

“He was fairly cavalier,” Quinn said. Recently released text messages between Musk and others appear jubilant over Musk’s large stake in Twitter and the potential for taking a board seat. It wasn’t until after Musk signed the merger agreement in late April that he undertook what’s called due diligence, or a close inspection, of the company’s health. It is only then that he started lodging complaints about bots, Quinn said. That may not have impressed the judge as the right approach for someone buying a major company.

Why did Musk change his mind now?

In addition to the trial and Thursday deposition, the cost of borrowing money is ticking steadily higher as the Federal Reserve and central banks worldwide attempt to constrain soaring inflation. If Musk lost at trial, the judge could not only force him to close the deal but also impose interest payments that would make Twitter even more expensive for Musk than the current $44 billion price tag. Experts say the interest costs likely started piling up mid-September.

But of course the deal isn’t done yet, and there are legal hoops yet to be jumped through. Given Musk’s track record and volatility, it would be a mistake to assume that it’s tied up in a bow.

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October 6, 2022
EXPLAINER: What’s next in Musk’s epic battle with Twitter?

Elon Musk’s monthslong tussle with Twitter took another twist this week when the Tesla billionaire seemed to return to where he started in April — offering to buy the company for $44 billion.

But it’s not over yet. Twitter says it intends to close the deal at the agreed-upon price, but the two sides are still booked for an Oct. 17 trial in Delaware over Musk’s earlier attempts to terminate the deal.

The judge presiding over the case said this week that she will “continue to press on toward our trial” because neither side has formally moved to stop it and on Thursday she ordered both sides to wrap up disputes over evidence.

IS THE TRIAL STILL ON?

Chancellor Kathaleen St. Jude McCormick, the Delaware Chancery Court’s head judge, hasn’t explicitly weighed in on Musk’s new proposal, but in a Wednesday ruling on an unrelated evidence dispute she made clear that nothing had changed for the court.

“The parties have not filed a stipulation to stay this action, nor has any party moved for a stay,” she wrote. “I, therefore, continue to press on toward our trial set to begin on October 17.”

On Thursday, she reiterated that the “trial is fast approaching” in a letter to lawyers and ordered Musk’s side to respond to outstanding evidentiary disputes by midday Friday.

Musk’s lawyer told Twitter this week that the Tesla CEO will complete the deal as long as he lines up the promised debt financing and provided that the Delaware court drops Twitter’s lawsuit against him. But Twitter is unlikely to give up on its legal proceedings unless it confirms that the deal is for real this time and not a tactical gambit.

WHAT HAPPENS NEXT?

Twitter lawyers had been preparing to grill Musk in a deposition set to begin Thursday, but it appears to have been put off as Musk’s renewed takeover offer remained in play.

The interview was scheduled to happen in Austin, Texas, not far from Tesla’s headquarters, after wrangling between the two sides over its location and timing. An earlier meeting was also postponed after Musk raised concerns about potential exposure to COVID-19, which led Twitter lawyers to complain to the judge about Musk’s “long resistance” to the meeting and concerns that he is “seeking to evade fair examination” as the central witness in the dispute with less than two weeks before the trial begins.

At the time he had been scheduled to be deposed, Musk was tweeting about Russia’s war in Ukraine.

IS MUSK READY FOR TWITTER TAKEOVER?

Musk’s ability to avert a trial and take Twitter private depends in part on how soon he and his co-investors can put up $44 billion to close the deal he spent months fighting to get out of.

Musk had already started preparing for the possibility — a likely one according to legal experts — that the court could side with Twitter in forcing the merger to go through. He sold about $7 billion worth of Tesla shares in August, saying it was important to avoid an emergency stock sale if the deal were forced to close and “some equity partners don’t come through.”

It’s not clear where those equity partners are today. Musk in May announced he had strengthened his stake with commitments of more than $7 billion from a group of investors, including Silicon Valley heavy hitters like Oracle co-founder Larry Ellison, who contributed $1 billion.

“I agree that is has huge potential … and it would be lots of fun,” Ellison told Musk in April, according to text messages disclosed last week in a court filing. But Ellison hasn’t weighed in publicly on the renewed offer.

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October 6, 2022
Judge delays Twitter trial, gives Musk time to seal buyout

NEW YORK — A judge has delayed a looming trial between Twitter and Elon Musk, giving the Tesla CEO more time to close his $44 billion deal to buy the company after months spent fighting to get out of it.

Musk had asked to halt the upcoming Delaware court trial, where the Tesla billionaire was expected to fare poorly against Twitter’s lawsuit to force him to complete his April merger agreement. Musk revived the takeover offer on Monday but said he needed time to get the financing in order.

Chancellor Kathaleen St. Jude McCormick, head of the Delaware Chancery Court, said Thursday that Musk and Twitter now have until Oct. 28 to close the deal. A trial originally set for Oct. 17 will happen in November if they don’t, she said.

Twitter had asked McCormick earlier Thursday to proceed with the trial, saying the billionaire refuses to accept the “contractual obligations” of his April agreement to buy the social media company and take it private.

Twitter disputed Musk’s claim that the San Francisco-based company is refusing to accept his renewed bid. Musk told Twitter earlier this week he’s ready to buy the company once again after trying to back out of the deal over the summer, accusing it of refusing to give him information about “spam bot” accounts on the service.

Twitter described Musk’s move to delay the trial as “an invitation to further mischief and delay” after his arguments for terminating the agreement haven’t had merit.

But after the judge’s ruling, Twitter reiterated in a statement that it was ready to close the deal on the share price agreed upon in April: “We look forward to closing the transaction at $54.20 by October 28th,” referring to the price Musk originally offered for each Twitter share.

Brooklyn Law School professor Andrew Jennings said Twitter wants to be certain that the deal will get done and not allow “wiggle room for Musk to walk away again.”

Musk attorneys argued that Twitter was disagreeing with the trial delay “based on the theoretical possibility” of Musk not coming up with the financing, which they called “baseless speculation.”

They said Musk’s financial backers “have indicated that they are prepared to honor their commitments” and are working to close the deal by Oct. 28.

Musk attorney Alex Spiro said in a statement Thursday that “Twitter offered Mr. Musk billions off the transaction price” but Musk “refused because Twitter attempted to put certain self-serving conditions on the deal.” He didn’t elaborate on what those conditions were. Twitter hasn’t described the talks beyond what its attorneys have said in court.

Twitter’s shares fell $1.91, or 3.7%, to close at $49.39 on Thursday. It was the stock’s second day of declines following a surge of more than 22% on Tuesday after Musk made his renewed offer to buy the company.

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October 6, 2022
Judge delays Twitter v. Elon Musk trial to allow deal to close

The judge in a legal battle between Twitter Inc.
TWTR,
-3.72%
and Tesla Inc.
TSLA,
-1.11%
Chief Executive Elon Musk on Thursday delayed their trial, previously set for Oct. 17, to give the sides time to close the $44 billion acquisition at the heart of the beef. Trial was set to begin Oct. 17 in Delaware Chancery Court, but Chancellor Kathaleen McCormick ruled Thursday afternoon that the two sides would have until Oct. 28 to close the transaction. If Musk has not closed on his deal to buy Twitter by then, a trial date will be set for November, the judge ruled.

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October 6, 2022
Judge delays Twitter trial, gives Musk time to seal buyout

NEW YORK — A judge has delayed a looming trial between Twitter and Elon Musk, giving Musk more time to close his $44 billion deal to buy the company after months spent fighting to get out of it.

Chancellor Kathaleen St. Jude McCormick, head of the Delaware Chancery Court, said Thursday that Musk has until Oct. 28 to close the deal. A trial set for Oct. 17 will happen in November if he doesn’t, she said.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Twitter is asking a Delaware court to proceed with an upcoming trial against Elon Musk, saying the billionaire refuses to accept the “contractual obligations” of his April agreement to buy the social media company for $44 billion.

Twitter attorneys sent a letter Thursday to the Delaware Chancery Court’s head judge, not long after Musk’s legal team asked her to call off the trial while he works on a renewed bid to buy the company.

Twitter disputed Musk’s claim that the San Francisco-based company is refusing to accept the new bid, which Musk told the company about earlier this week after trying to terminate the deal over the summer.

The company has been seeking a court order to force the completion of the merger and said it intends to close the deal at the agreed-upon price, but described Musk’s move to delay the trial as “an invitation to further mischief and delay.”

Twitter said Musk should be aiming to close the deal by Monday, ahead of a trial set to begin a week later on Oct. 17.

“But they aren’t. Instead they refuse to commit to any closing date,” said the letter from Twitter lawyer Kevin Shannon. “They ask for an open-ended out, at the expense of Twitter’s stockholders (who are owed $44 billion plus interest), all the while remaining free to change their minds again or to invent new grounds to avoid the contract.”

Brooklyn Law School professor Andrew Jennings said Twitter wants to be certain that the deal will get done and not allow “wiggle room for Musk to walk away again.”

Twitter apparently hasn’t got the certainty it wants.

“Otherwise, we would’ve seen a joint filing to the court on how the two sides want to proceed,” Jennings said. “As of right now, the trial train keeps rolling until both parties or the court apply the brakes.”

Musk’s attorneys said earlier Thursday that the trial should be adjourned to leave more time for Musk to secure the financing.

“Twitter will not take yes for an answer,” said the court filing signed by Musk attorney Edward Micheletti. “Astonishingly, they have insisted on proceeding with this litigation, recklessly putting the deal at risk and gambling with their stockholders’ interests.”

Eric Talley, a Columbia University law professor, tweeted Thursday that Twitter “is absolutely right not to take ‘yes’ for an answer, and everyone knows why. (They tried that in April and it didn’t go so well).” He added that Twitter would, however, take a “certified bank transfer” from Musk.

Musk attorneys argue that Twitter is disagreeing with the trial delay “based on the theoretical possibility” of Musk not coming up with the financing, which they call “baseless speculation.”

They said Musk’s financial backers “have indicated that they are prepared to honor their commitments” and are working to close the deal by Oct. 28, roughly a week after the trial was set to conclude.

Twitter’s shares fell $1.91, or 3.7%, to close at $49.39 on Thursday. It was the stock’s second day of declines following a surge of more than 22% on Tuesday after Musk made his renewed offer to buy the company.

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October 6, 2022
Judge delays trial between Twitter and Elon Musk, giving Musk more time to close $44B deal to buy company

Judge delays trial between Twitter and Elon Musk, giving Musk more time to close $44B deal to buy company

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October 6, 2022
EXPLAINER: What’s next in Musk’s epic battle with Twitter?

Elon Musk’s monthslong tussle with Twitter took another twist this week when the Tesla billionaire seemed to return to where he started in April — offering to buy the company for $44 billion.

But it’s not over yet. Twitter says it intends to close the deal at the agreed-upon price, but the two sides are still booked for an Oct. 17 trial in Delaware over Musk’s earlier attempts to terminate the deal.

The judge presiding over the case said this week that she will “continue to press on toward our trial” because neither side has formally moved to stop it and on Thursday she ordered both sides to wrap up disputes over evidence.

IS THE TRIAL STILL ON?

Chancellor Kathaleen St. Jude McCormick, the Delaware Chancery Court’s head judge, hasn’t explicitly weighed in on Musk’s new proposal, but in a Wednesday ruling on an unrelated evidence dispute she made clear that nothing had changed for the court.

“The parties have not filed a stipulation to stay this action, nor has any party moved for a stay,” she wrote. “I, therefore, continue to press on toward our trial set to begin on October 17.”

On Thursday, she reiterated that the “trial is fast approaching” in a letter to lawyers and ordered Musk’s side to respond to outstanding evidentiary disputes by midday Friday.

Musk’s lawyer told Twitter this week that the Tesla CEO will complete the deal as long as he lines up the promised debt financing and provided that the Delaware court drops Twitter’s lawsuit against him. But Twitter is unlikely to give up on its legal proceedings unless it confirms that the deal is for real this time and not a tactical gambit.

WHAT HAPPENS NEXT?

Twitter lawyers had been preparing to grill Musk in a deposition set to begin Thursday, but it appears to have been put off as Musk’s renewed takeover offer remained in play.

The interview was scheduled to happen in Austin, Texas, not far from Tesla’s headquarters, after wrangling between the two sides over its location and timing. An earlier meeting was also postponed after Musk raised concerns about potential exposure to COVID-19, which led Twitter lawyers to complain to the judge about Musk’s “long resistance” to the meeting and concerns that he is “seeking to evade fair examination” as the central witness in the dispute with less than two weeks before the trial begins.

At the time he had been scheduled to be deposed, Musk was tweeting about Russia’s war in Ukraine.

IS MUSK READY FOR TWITTER TAKEOVER?

Musk’s ability to avert a trial and take Twitter private depends in part on how soon he and his co-investors can put up $44 billion to close the deal he spent months fighting to get out of.

Musk had already started preparing for the possibility — a likely one according to legal experts — that the court could side with Twitter in forcing the merger to go through. He sold about $7 billion worth of Tesla shares in August, saying it was important to avoid an emergency stock sale if the deal were forced to close and “some equity partners don’t come through.”

It’s not clear where those equity partners are today. Musk in May announced he had strengthened his stake with commitments of more than $7 billion from a group of investors, including Silicon Valley heavy hitters like Oracle co-founder Larry Ellison, who contributed $1 billion.

“I agree that is has huge potential … and it would be lots of fun,” Ellison told Musk in April, according to text messages disclosed last week in a court filing. But Ellison hasn’t weighed in publicly on the renewed offer.

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October 6, 2022
Elon Musk would lose 13.5 million Twitter followers if he scraps most spam accounts; Justin Bieber would lose 27.6 million, data finds

Elon Musk would lose about 13.5 million Twitter followers, if he pushes through his plan to get rid of most spam accounts, according to data crunched by CodeClan, a Scottish digital skills academy.

The Tesla Inc.
TSLA,
-3.84%
CEO on Tuesday gave up a legal battle and agreed to pay $44 billion to take over the social-media company. Musk has said he wants less than 5% of Twitter
TWTR,
-2.35%
accounts to be spam.

But Musk’s losses pale in comparison with singer Justin Bieber, who would lose 27.6 million of his 114.2 million followers, according to the data.

Britney Spears would lose the highest percentage of fake followers out of the top 20 with some 48% of her 55.8 million followers being classified as fakes.

See also: Elon Musk says Twitter will eventually be part of ‘X, the everything app’

Former President Barack Obama would lose 19.3 million of his 131.9 million followers, the data shows.

Among other high profile names; Katy Perry has about 23.3 million fakes among her 108.9 million followers, or 21.4% of the total; Rihanna has about 26.5 million fakes, or 24.9% of her 106.5 million followers; Lady Gaga has 10.9 million fakes in her roster of 84.7 million followers, for 12.9% of the total; Kim Kardashian has about 14 million fakes, or 19.4% of her 72.4 million followers, and Ellen DeGeneres has about 24.4 million fakes, equal to 31.5% of her 77.5 million followers.

See now: Elon Musk’s legal battle with Twitter may be over, but his war with the SEC continues

In the world of politics, Indian Prime Minister Narendra Modi has about 17.5 million fakes in his 78.8 million followers, equal to 22.2% of the total.

CNN Breaking News has about 7.7 million fakes, or 12.2% of its 63.1 million followers. Bill Gates has about 14.3 million fakes, or 24.2% of his 58.9 million followers. And NASA has some 14.7 million fakes, or 26.8% of its 57.1 million followers.

Twitter shares were slightly lower premarket, while Tesla was down 1.1%.

Shares of Digital World Acquisition Corp.
DWAC,
+0.03%,
the special-purpose acquisition company, or SPAC, buying the company behind former President Donald Trump’s Truth Social social-media company, was slightly higher premarket after falling more than 5% Tuesday in the wake of the Musk/Twitter news.

The SPAC has fallen 67% in the year to date, while the S&P 500
SPX,
-1.28%
has fallen 20%.

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October 5, 2022
Elon Musk’s plans for Twitter may take inspiration from Chinese super apps

Elon Musk’s revived $44 billion deal to buy Twitter sparked fresh debate over what the billionaire will do with the service if he eventually owns it.

On Tuesday, Musk tweeted that buying Twitter is an “accelerant to creating X, the everything app.” He did not provide further details.

Musk may be hinting toward so-called “super apps” which are popular in China and other parts of Asia and pioneered by the likes of Chinese technology giant Tencent.

Super apps is a term to describe an app that often acts as a one-stop shop for all your mobile needs. For example, you might order a taxi or food via the app and at the same time do payments and messaging. This eliminates the need to have multiple apps for different functions.

Chinese app WeChat, run by Tencent, is the biggest super app in the world, with over a billion users.

In WeChat, users can message people, do mobile banking, pay for things online or in store by scanning a barcode, play games, post videos, do online shopping, hail a car and many other things.

When Musk talks about “the everything app,” he could be thinking about WeChat.

The Tesla CEO has previously expressed admiration for WeChat calling the app “great” during a town hall with Twitter employees in June. Musk said there is no WeChat equivalent outside of China.

“And I think that there’s a real opportunity to create that,” Musk told employees. “You basically live on WeChat in China because it’s so useful and so helpful to your daily life. And I think if we could achieve that, or even close to that with Twitter, it would be an immense success.”

Musk said that he wants at least a billion people using Twitter, up from 237.8 million at the end of the second quarter.

Tencent runs the ubiquitous Chinese messaging app WeChat. The company has a short form video feature with in the app and has began to monetize that through video ads in the feed. Tencent said such ads could become a “substantial” source of revenue in the future.

Budrul Chukrut | Sopa Images | Lightrocket | Getty Images

One of WeChat’s biggest features is WeChat Pay. This is a feature where users can scan a barcode in a store to pay via their mobile or they can send money to friends via the chat function. WeChat Pay can also be used for purchases online.

Musk said during the town hall that he thinks that payments within Twitter would be an “interesting thing to do.”

However, super apps like WeChat haven’t really taken off in a big way in Europe, the U.S. and other western markets.

WeChat meanwhile is heavily censored in China, something Musk is unlikely to do with Twitter, given his past criticisms of the platform’s content moderation strategy which the billionaire feels has stifled free speech.

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October 5, 2022
Twitter stock surges 22% after Elon Musk gives up bot battle and commits to $44 billion deal

Tesla Inc. Chief Executive Elon Musk now plans to close his proposed $44 billion deal for Twitter Inc., according to a Tuesday filing that arrived less than two weeks before a judge was scheduled to hear a case on the disputed acquisition.

Musk’s lawyers sent a letter to Twitter’s management team indicating that he was proposing to move forward with the original acquisition terms late Monday, and that letter was released as a filing with the Securities and Exchange Commission Tuesday afternoon. A Twitter spokesperson later confirmed to MarketWatch that the company intended to proceed with the deal for $54.20 a share.

Twitter
TWTR,
+22.24%
shares jumped 22.2% to $52 in Tuesday’s session, after an hours-long trading halt that started after Bloomberg News first reported the move around noon Eastern time, suggesting a possible end to the legal saga between the two parties. The increase is the second best daily percentage gain on record for Twitter stock, behind only the 27.1% gain experienced when Musk disclosed his initial ownership stake in Twitter in April. Twitter was the best performing stock Tuesday in the S&P 500 index
SPX,
+3.06%,
and is now up 20.3% on the year.

The two sides have been locked in a legal battle for months, and a Delaware Chancery Court judge was expected to hear from both sides in a five-day trial slated to begin Oct. 17. The Wall Street Journal reported Tuesday that the Delaware judge asked the two sides to come up with a plan by the end of the day that could bring about an end to the litigation.

“Musk could see the writing on the wall that he was going to lose the trial,” said Josh White, an assistant finance professor at Vanderbilt University, in an email to MarketWatch. “By doing this, he can save legal costs, time and ultimately losing in a very public trial.”

See also: Here’s how Twitter’s users reacted to Musk agreeing to buy the platform

Musk agreed in April to buy Twitter in a deal that valued the company at roughly $44 billion, but he later said that he was terminating the deal. The Tesla
TSLA,
+2.90%
CEO cited concerns about bot activity on Twitter and said he believed the company’s management team wasn’t accurate in its public disclosures about the extent of spam activity on the platform.

White noted that text messages released in conjunction with the case showed that Musk was aware of Twitter’s bot issue before going forward with his original deal offer, and he doubted that Musk would be able to show that “something really changed” after that point.

“If he offered less than $54.20, Twitter might have proceeded with the trial, and he would be deposed,” White continued. “By offering the original price, he maximizes the chance that Twitter accepts and the trial ends. I expect Twitter’s board to accept the deal and for it to close rather quickly.”

Wedbush analyst Daniel Ives agreed that the Tesla leader’s latest move marked a “clear sign that Musk recognized heading into Delaware Court that the chances of winning vs. Twitter board was highly unlikely and this $44 billion deal was going to be completed one way or another,” he wrote in a note to clients. “Being forced to do the deal after a long and ugly court battle in Delaware was not an ideal scenario and instead accepting this path and moving forward with the deal will save a massive legal headache.”

Opinion: Twitter stood up to Elon Musk and won, but will it feel like a win once he owns it?

Vanderbilt’s White noted that a deal at the original price would be a “big” win for Twitter shareholders.

“The stock price of Snap
SNAP,
+8.42%
and Twitter seemed to trade around the same price level before the offer,” he told MarketWatch. “Snap is now a ~$10 stock with a $17 billion market cap. So Twitter’s shareholders win by getting $54.20 rather than having the price drop to $10-20 per share.”

Additionally, he deemed Delaware business law another winner: “This deal shows that even the richest man in the world cannot overcome well-written contracts enforced in a neutral and fair way by the Delaware courts.”

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October 4, 2022
Elon Musk offers to buy Twitter at original price days before trial: Sources

Elon Musk has reversed course and is again proposing to buy Twitter for $54.20 a share, according to sources familiar with the matter. A deal could happen as soon as Friday, the sources added.

Twitter shares jumped as much as 15% on Tuesday after Bloomberg first reported on the Tesla CEO’s plans to go forth with his deal to acquire the company. The stock was halted after the report.

A few weeks after Musk agreed to the deal earlier this year, valuing Twitter at $44 billion, he quickly tried to back out, officially informing the company in July of his intentions to terminate the agreement. Twitter sued Musk to force him to go through with the purchase. The two sides were scheduled to go to trial in Delaware Chancery Court on Oct. 17.

Musk alleged that Twitter was misstating the number of “bots” on its service as one of the reasons he was reneging on the deal. He and his lawyers claimed the social media company was misleading investors by providing false numbers in corporate filings with the Securities and Exchange Commission.

Twitter countered, however, that Musk’s assertions of fraud were incorrect and were based on a misunderstanding of the way the company tallies bots and fake accounts on its platform.

Musk also alleged Twitter failed to provide him with the necessary data related to spam and bots, which Twitter denied.

Twitter alleged Musk was looking for a reason to back out of the deal when the company’s shares dropped alongside a broader decline in the overall market.

Although Musk sought to delay the trial date, Delaware Chancellor Kathaleen McCormick rejected his wish citing the potential for Twitter to incur “irreparable harm.” The chancellor did allow Musk and his attorneys to amend their counterclaim to include certain accusations made by Twitter’s former head of security in a separate whistleblower suit against the company.

CNBC has learned that Musk could own Twitter within a matter of days and that all litigation would come to an end.

In September, Twitter shareholders approved Musk’s original bid to purchase the company.

Meanwhile, Tesla shares have dropped about $10 per share (about 4%) on the news so far Tuesday and are up about 2% for the day.

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October 4, 2022