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July 08, 2022

Elon Musk Formally Notifies Twitter of His Intent to Cancel His Purchase of the Company

We just got a warning of this yesterday:

Elon Musk may soon walk away from his $44 billion agreement to buy Twitter because he believes he does not have enough information to determine the level of fake accounts, according to published reports Thursday.

The world's richest man claims Twitter's spam accounts are not verifiable, the Washington Post reported, even after the social media giant in early June gave in to Musk's demands to provide info on hundreds of millions of daily tweets.

Musk has made it clear he believes the economy is tanking. He's trimming his own revenue-producing businesses. An article I linked some weeks ago made a persuasive case that all the tech companies that don't make any money have been kept alive only by constant re-infusions of capital -- new loans, basically -- and the cost of loans is becoming too expensive to keep doing this.

So many of these companies are going to "disintegrate," as that article said. A company like twitter will probably survive, but its value might be cut in half, or worse.

And Musk came in and offered more than its market value, pre-recession. Pre-disintegration.

I think all of his squawking about bots is his way of trying to connive some kind of legal justification to get out of a bad deal, or at least pressure Twitter's board into giving him a steep discount on this loser company's price.

I don't think this will work, though.

Billionaire Elon Musk wants to end his deal to buy Twitter, according to a letter sent by a lawyer on his behalf to the company's chief legal officer Friday.

In the letter, disclosed in a Securities and Exchange Commission filing, Skadden Arps attorney Mike Ringler charged that "Twitter has not complied with its contractual obligations."

Ringler claimed that Twitter did not provide Musk with relevant business information he requested, as Ringler said the contract would require. Musk has previously said he wanted to assess Twitter's claims that about 5% of its monetizable daily active users (mDAUs) are spam accounts.

"Twitter has failed or refused to provide this information," Ringler claimed. "Sometimes Twitter has ignored Mr. Musk's requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information."

If Musk walks away without some kind of legal justification he can blame on Twitter, he'll owe one billion dollars in a walk-away penalty.

Does Musk really think he can get left-leaning judges to agree with him? Musk gave the leftwing another nervous breakdown by threatening their stranglehold on speech and threatening to delete their power of censorship.

They will be out to teach him a lesson. And to make an example for anyone else who considers challenging the Ruling Class.

Here's the thing: I think he'd rather a billion dollars that than be saddled with the full $44 billion cost of Twitter. Plus the yearly costs to maintain an unprofitable moneysuck.

It's too bad that we won't have free speech in this country, and we'll continue to have Conservative, Inc. fighting against free speech on behalf of their tech monopolist paymasters.

I had hoped... that maybe Twitter would just walk away -- they wanted to keep their leftwing censorship machine in leftwing hands, anyway -- but now they do have some shareholders to consider:

Bret Taylor @btaylor

The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.

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posted by Ace at 06:05 PM

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