Elon Musk withdrew his offer to buy the social media company Twitter. This started a division in the world throughout the Internet as some people side with the wealthiest person on Earth, and others blame him for ‘playing’ with his power.
After Elon’s 2-month saga to acquire the company, now both affected sides are clashing heads and preparing for a legal battle. A legal battle that will determine the way business will be done in the future. That will determine whether someone can just make an offer, sign it, and walk away with a ‘bizarre’ excuse.
After two months of going back and forth with the deal, keeping the whole company and the world in uncertainty about what will happen, finally, Elon judged that he doesn’t want the company anymore. In Mid April, Elon Musk made an offer of $44 billion to acquire the social media company. Now finally he decided to withdraw it after realizing that the company is ‘mispresenting’ itself to the world and the truth about some details is not as it seems.
Twitter vs Elon Musk – Now A Third Party Joins The Battle – SEC Shows No Mercy
The exact moment when Elon decided to back off was when he realized that the spam/fake account numbers on the official documents is faked. In other words, Twitter has more than 5% of fake accounts on its platform. What do you say? You already presumed this even before the publication? Yes, you are not alone. Everyone with consciousness is aware that there are more than 5% fake accounts on any given social media. However, Elon seems not to be so aware of these ‘details’. Even though his Twitter account is one of the most popular ones on the platform.
That’s why now, the U.S Securities and Exchange Commission (SEC) is knocking on Elon’s door, looking for proof that the billionaire violated the financial disclosure rules.
The focus of the commission is mostly on Musk’s tweets and public claims before and during the uncertainty of the deal. As we are all aware, Elon Musk uses Twitter mostly for spreading his voice and his beliefs to the world. So as such, he might have tweeted something that might indicate a possible violation of the rules.
“We note that on May 17, 2022, Elon R. Musk referred to the pending acquisition of Twitter, Inc. and publicly stated via his Twitter feed that “this deal cannot move forward.” – they state from the Exchange Commission offices. “The term ‘cannot’ suggests that Mr. Musk and his affiliates are exercising a legal right under the terms of the merger agreement to suspend completion of the acquisition of Twitter or otherwise do not intend to complete the acquisition.”
Elon Musk decides to reply to this letter. Well, not himself, but his legal team, however, it still counts. According to him, at the time of tweeting, he was still interested in buying the company. However, he had some doubts about the data they claimed.
“Mr. Musk does not believe, however, that the May 17, 2022 social media posts regarding spam and fake accounts on Twitter Inc.’s platform triggered any required amendment to his previous filing” – Musk’s lawyer says. “Despite Mr. Musk’s desire to obtain information to evaluate the potential spam and fake accounts, there was no material change to Mr. Musk’s plans and proposals regarding the proposed transaction at such time.”
The Securities and Exchange Commission had its eyes locked on Musk since he acquired 9% of the Twitter shares. They launched the investigation after he allegedly used the wrong form to announce his acquisition of the major share of the company.
Musk remains silent to the commission and rejects to answer any of their letters, calls, and messages. Since he did not respond to any of these, they finally decide to try emailing him as well.
This is not the first time that the SEC is in battle with the billionaire. They had been head to head several times before for various tweets. It is strange how someone’s tweets can influence his business. Back in 2018 Musk tweeted that he will take Tesla private – as a result, he paid a $20 million fine to the commission. Additionally, the commission forced him to sign an agreement. And all that he did is a tweet stating that he has the funds needed for financing and taking Tesla private. Then, the SEC filed a lawsuit against him for committing fraud.
Kathleen McCormick is the judge that will be judging on the trial for the Twitter deal. It is not the first time that she had been involved in cases like this. And her ruling – won’t be to Musk’s liking. McCormick is known to have ordered a buyer to close a deal as a verdict of the trial.
“She already has a track record of not putting up with some of the worst behavior that we see in these areas when people want to get out of deals. She is a serious, no-nonsense judge.” – Adam Badawi, a law professor at the University of California Berkeley states.
According to people close to her, she is the exact opposite of Musk in any view. She is soft-spoken, approachable, and friendly. However, she is a person that stands her ground as well. So there is no doubt that the trial will be righteous.
Twitter hides the number of fake/spam accounts for too long. That is what drove Elon to the point to terminate the deal. He overbid it too, and that is an additional reason for ‘easy quitting’. On the contrary, Twitter and Musk signed a deal to which he must abide. The fake/spam account issue is something that is a ‘public secret’. Everybody can guess that the number of spam bots is more than 5%. Musk most probably was aware of this as well, but due to pure spite is now not continuing the deal.
What do you think? Will the judge order closing of the deal?
