The legal process started against Elon Musk is based on several solid grounds. Namely, the SpaceX owner and CEO, Elon, faces accusations of wrongful conduct, false statements, and market manipulation.
Obviously, Elon’s Twitter saga did create a chaotic environment in Twitter’s headquarters, since Twitter’s shares are down by more than 25% since the buying negotiations started.
The Twitter Takeover Complications Result In A Legal Process Against Elon Musk
Musk’s initial buying bid is $54.2 per share, which at the time is higher than the actual stock price. And now, well, considerably higher. The highest price that Twitter shares are reaching during the last year on the stock market is $51.7. This is back in April when Elon is announcing the deal he is about to make.
Since then, there have been some fluctuations in the market, however, looking at the greater picture, the stock price for Twitter shares is on a constant fall reaching the bottom of $35.76 per share, this week on the 24th of May.
The lawsuit documents claim that Musk already benefits by delaying the signing of the contract. Both financially and psychologically. By delaying, the share price keeps on falling and he can make stronger points by seeking a lower price than the initial offer.
The lawsuit also includes a mention of several tweets by the billionaire that are obviously misleading. The claim is that due to his large follower group, he has a broad audience prone to believe his words. And this, he can use in his favor on a great scale.
This is referring to Elon’s post from May 13th, where he announces the ‘hold’ he puts on the contract.
“Twitter deal is temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.” – The billionaire tweets.
However, looking at the stock market plot, this does not represent a pivotal point or a turning point from where the fall starts. On May 13th, the stock market price of Twitter shares is little more than $40. This implies that it had already fallen by around 20% until then.
The real start of the fall is back on the 5th of May. After fluctuating around $50 per share for about two weeks, the stock market price starts to point down. What really causes this fall is the bare announcement that Elon did about buying the company. So can they really put this weight on his shoulders only? It’s a free world, he believes in free speech – he can say whatever he wants.
“The complaint we filed in San Francisco seeks to hold Musk liable for his unlawful conduct.” – Bottini says.
Frank Bottini, one of the lawyers who take part in the lawsuit against Elon and represents the Twitter investors in an interview for the BBC says that the lawsuit is filed and there is no coming back. As Elon does not seem to stop and “continues to disparage the company he wants to buy for $44bn in an effort to renegotiate the purchase price.”
And that is where Elon’s mistake lies. He rushed the offer. Where did he rush so much? And finally, why overbid the price?
According to BBC, many analysts are positive that the billionaire is now looking to find a way to lower the price. Something that he could have done in the first place, by offering a fair price. But back then he says he is not looking to make money out of this company, and that he doesn’t care about the economics. But, nonetheless, the tables have turned. Now it seems like he actually does show interest in the economics of the deal.
He tweets about the bots and spam accounts on Twitter on several occasions, expressing his concern about the matter. However, according to many, this is just a ‘dog-ate-the-homework’ excuse that he is using to get out of the deal.
Everybody is aware of the bots and spam accounts. It is highly unlikely that he did not see this coming when initially thought about buying the company. I mean, even we, common people receive many fake or spam messages, follow requests and etc. And someone with Elon’s popularity? You can only imagine.
The main name that sits behind the lawsuit to Elon s William Heresniak. He is a shareholder in the company and he says that he does this not only for himself but for all that have similar interests to him – referring to the other shareholders.
The lawsuit is already filed at the US District Court for the Northern District of California.
Many world newsletters had already tried to contact Elon and ask about the situation. To see what is his response to the accusations. However, Elon and his representatives and lawyers did not reply to any of the reaching messages.
Contrary to all the above, just two days ago Elon accepts to transfer an additional advance of $6.25 billion to Twitter for buying the company, as a sign of his strong will to take it over.
So what is Elon’s plan?
According to critics, it all comes down back to money and business. The billionaire pledges that he doesn’t have an interest in ‘making money’ with the social media. But his oversized bid does matter to him since it consists of around 20% of his complete fortune. Would you throw away 20% of your net worth for something that is showing itself to be unworthy of that much money?
Yes, replies in the fashion of ‘he made an offer and he needs to stick to it’ will come at us now, but think of it this way. $44 billion dollars is a considerably great amount of funds.
Analysts are sure that Elon will do everything in his power to lower the bid to an agreeable price. And we are waiting for it. The promises that he’s made for the changes on the platform are ones that are worth waiting for.
