As a securities litigator, I have taken a keen interest in Tesla Inc. CEO Elon Musk's epic battle with Twitter Inc.
Obviously, I am not alone. The financial press is having a field day, and there seems to be an endless stream of news, plot twists and petty behavior.
The Merger Case
It's a complex dispute, involving hundreds of court filings. But it can be summarized in a few sentences: In April, Musk agreed to buy Twitter at a price that no longer seems like a good deal.
He pursued the deal quickly, and perhaps rashly — essentially waiving his right to conduct standard due diligence on the transaction. Almost immediately thereafter, two things happened: (1) the stock market went south, and (2) Twitter announced that it had overcounted its total number of users over the preceding three years.
Musk backed out of the deal and Twitter sued.
Musk contends that Twitter misrepresented its financial condition — see No. 2 above — and therefore he has the right to terminate the deal.
Twitter claims that Musk simply has buyer's remorse — see No. 1 above — and his concerns about Twitter's user statistics are a mere subterfuge.
Excerpted from Law360. To read the full article, click here.