Elon Musk Pulls Out Of Twitter Deal Because Of World War 3
Elon Musk's ongoing feud with Twitter has had some pretty crazy twists, which have yet to stop coming. The latest piece of evidence in court suggests the world's richest man might have backed out of the deal not because of concerns about bots, or worries about Tesla's share price, but because he believed World War Three was about to pop off.
The Musk-Twitter saga started back in April, when the eccentric billionaire revealed himself to be the social media platform's largest shareholder. Musk then stated he intended to buy Twitter and turn it into a "free speech platform." Although people weren't sure how to treat an announcement from a man that jokingly threatens to buy major businesses like Manchester United every few years, the revelation quickly turned into a formal bid. Things seemed to move smoothly at first, with Musk making an offer of around $54.20 a share, roughly $44 billion in total, for the company. The offer was accepted and Musk put up a significant chunk of his own capital, alongside some loans he had managed to acquire. Then things hit a snag.
Musk claimed he wasn't convinced by company estimates that only 5% of Twitter accounts were run by bots. The 51-year-old asked for the process Twitter used to determine that figure, along with a large amount of data his team could comb through and confirm the numbers. Twitter saw the request as unreasonable and denied it. Musk then withdrew from the deal. But things didn't end there. Twitter decided to sue and things have proceeded to get weirder.
Putin's speech may have made Musk pull out
New allegations have surfaced suggesting Musk backed out of the deal over concerns about the beginning of a new world war. The accusation is based around a series of texts the billionaire allegedly sent to a Morgan Stanley banker who was involved in Musk's attempts to raise funds for the takeover, Business Insider reported. The bank was expected to supply the world's richest man with $13 billion in financing.
The texts in question were read out in court by one of the social media firm's attorneys. The billionaire is alleged to have sent the words: "Let's slow down just a few days. Putin's speech tomorrow is really important. It won't make sense to buy Twitter if we're heading into World War 3." The speech referred to was Russian President Vladimir Putin's May 9 Victory Day speech (via Business Insider).
The day, marks the USSR's contributions to the victory over Nazi Germany in World War Two. It's highly significant for Russia and involves a military parade in Moscow. The war in Ukraine had been raging for close to three months at the time, and Russia failed to meet any of its key objectives. Despite sanctions and extreme tension, Putin did not declare war on the West during his speech, but he did reiterate that he believed the war in Ukraine was "the only right decision" and accused the west of plotting to invade Russia.
Musk's lawyers dismissed the claims as "utter nonsense," and say the full series of texts between Musk and the Morgan Stanley banker will refute the allegation that Musk pulled out of the deal over concerns about World War III. Lawyers are expected to introduce the full text chain to the court next week (via Business Insider).
Losing the case could cost Musk billions
When Musk entered serious talks to buy Twitter, he agreed to pay a $1 billion break fee should he back out of the deal. However the billionaire is trying to argue that he should not be allowed to pay due to Twitter's withholding of information during the negotiation process. Should he lose the case, it is more than likely the enormous break fee will have to be paid. But a courtroom loss may end up costing Musk lot more than that.
Twitter's lawyers are hoping a victory will lead to a judge forcing Musk's acquisition of the social media platform. That means Musk would be forced to pay the $44 billion owed when he originally agreed to buy Twitter. It's possible he will be made the platform's reluctant owner due to a piece of contract law called "specific performance," which applies to cases where simply handing over the break fee will not make things right. Twitter's board and shareholders aren't happy with the Tesla founder and have accused him of "trashing" the firm, "disrupting its operations," and "destroying stockholder value." So it may be argued that $1 billion, as large a number as that is, won't make up for damages incurred.
If it sticks, this would be one of the largest cases in legal history to result in a specific performance ruling. Because of the lack of similar high-profile cases, legal pundits are unsure how it might play out. One of the best guesses suggests Musk's net worth could drop by around $5 billion at the end of this case.