Musk & Twitter Drama Process -- Future Outlook?
After months of dramatic news, Musk finally announced he terminated his $44 billion Twitter takeover bid on July 8.
The reason was Twitter's “breach” of multiple provisions of the merger agreement.
1. The drama process between Elon Musk & Twitter:
A quick summary:
Musk started to seek a takeover in April, but changed his statements in May, and announced to abandon its takeover in July.
On July 7, Twitter said the proportion of fake accounts has been below 5% since 2013, but Musk insisted that the proportion may be closer to 20%
Some analysts believe that Musk may want to seek a lower takeover price.
2. Refused to pay the breakup fee - Twitter pledging to take Musk to court
According to the previously signed agreement,
if one of them terminates the deal, then it needs to pay a breakup fee of $1 billion.
But Musk is now claiming that Twitter is at fault for not providing information about the fake account" that was critical to Twitter's business and financial performance, which led to the suspension of the acquisition.
But Twitter hired a prominent law firm, Worchall Lipton, to prepare a lawsuit against Musk.
Larry Hamermesh, a University of Pennsylvania law professor who specializes in Delaware corporate law disputes,
describes an MAE as an “unexpected, fundamental, permanent” negative development — akin to blowing a hole in the transaction that can’t be fixed.
3. What is the outlook for the takeover case?
1. if Musk loses the case, he may be forced to continue with the acquisition at $54.20 per share.
2. if the court allows the acquisition to be abandoned, Musk may have to pay a $1 billion breakup fee.
3. The two sides reach an out-of-court settlement and Musk continues the acquisition at a lower price.
Bottom Line
According to Daniel Ives of Wedbush Securities,
what Musk had done is a "nightmare" for Twitter, and $Twitter (TWTR)$ could face a protracted legal battle and shares may fall to $30 if the deal fails.
So what's your opinions towards Musk's termination of his acquisition?
What might be the final outcome of this takeover?
Are you bullish on Twitter's future development?
Share your thoughts in the comment section & win tiger coins~
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The drama process between Elon Musk & Twitter.
And yes I am quite bullish.
Elon Musk is as changeable as the weather vane. In the beginning he was so hot on buying Twitter but now he has gone cold. Since he announced his decision to abandon the Twitter Deal, its shares have taken a serious tumble. There is talk that it can even hit USD 11 by the analysts.
The impending legal case will be a huge, long drawn one and will not be beneficial to both Elon Musk and Twitter. The only ones to benefit will be the lawyers. I feel for the shareholders and employees of Twitter. They are the victims of this fallout.
Ultimately the final outcome will depend on the judges. But morally, Twitter has the higher ground. At the very least, Elon Musk should pay the USD1 billion break up fee. But I would really like to see that Elon Musk and Twitter reach a settlement to buy Twitter for a lower price and things would calm down. This would be the best outcome for everyone.
@Mainstreet_Trades @TigerStars @CaptainTiger