Twitter shareholders want Elon Musk to keep his word and buy out the social network for $44 billion. But the tech multibillionaire is doing everything he can to try to nix the deal.
On Tuesday, at a special meeting of Twitter shareholders, the company’s investors voted in favor of approving Musk’s takeover, which was announced in April. Twitter announced that, based on a preliminary tabulation of the stockholder vote, approximately 98.6% of the votes cast approved the proposal to adopt the merger agreement.
“Twitter stands ready and willing to complete the merger with affiliates of Mr. Musk immediately, and in any event, no later than on September 15, 2022, the second business day following the satisfaction of all conditions precedent, which is the timeline required by the merger agreement,” the company said in a press release.
But the shareholder vote was an inconsequential formality to the main issue: that Musk doesn’t want to buy Twitter anymore. Musk is heading toward a court trial to fight Twitter’s demand that he close the deal at the $54.20/share price that was previously agreed on.
It’s unclear whether Musk, who is Twitter’s largest single shareholder with a 9.6% stake, participated in Tuesday’s shareholder vote.
Lawyers for Musk, who is the world’s richest person and CEO of Tesla and SpaceX, have notified Twitter on three separate occasions that he believes Twitter has breached the terms of the acquisition agreement. Each time, Twitter has responded that Musk’s objections are “invalid and wrongful.”
Most recently, in a Sept. 9 letter to Twitter, Musk’s lawyers called out the social network’s severance agreement with Peiter “Mudge” Zatko — its former head of security who was fired in January — under which Twitter made severance payments to Zatko and his counsel totaling $7.75 million. That, according to Musk’s legal team, violated a provision of their deal under which Twitter agreed to not “grant or provide any severance or termination payments or benefits” without first getting approval from Musk.
Zatko, whom Twitter has characterized as a disgruntled ex-employee, has alleged in SEC and FTC complaints that Twitter concealed ”extreme, egregious” lapses in security and privacy practices, among other problems. Separately on Tuesday, Zatko testified before a Senate Judiciary Committee hearing reiterating and elaborating on his allegations.
Anyone know who the secret clients are? Let’s out them on Twitter rn haha. https://t.co/g8D1mQZLRv
— Naughtius Maximus (@elonmusk) September 13, 2022
In a letter last month, Musk’s lawyers cited Zatko’s allegations as additional evidence that the pact to buy Twitter was null. That came after the Musk team first told Twitter, in July, that he was exiting the deal because the company allegedly could not prove its claim that spam and fake accounts are less than 5% of active users.
Twitter in July sued Musk, seeking to enforce the buyout deal. A judge in the Delaware Court of Chancery set a five-day trial in to hear Twitter’s case against Musk starting Oct. 17. Last week, the judge presiding over the case ruled that Musk may add allegations from Zatko’s complaint to his countersuit but denied Musk’s request to delay the start of the trial until November.
Musk was originally enthusiastic about the prospect of owning Twitter, floating ideas like authenticating the identities of all users and charging businesses to use the social network. Twitter’s lawyers allege Musk got cold feet after his personal net worth dropped with the decline in Tesla’s stock price.
