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What trouble does Elon Musk face when he doesn’t buy Twitter?

Avatar of Nick John By Nick John Dec9,2023 #Elon Musk #Twitter #What
What trouble does Elon Musk face when he doesn't buy Twitter? 2
What trouble does Elon Musk face when he doesn't buy Twitter? 2

Immediately after Musk’s lawyer informed the US Securities Commission (SEC) that the billionaire wanted to terminate the deal, Twitter announced its intention to sue him for violating many merger terms.

`Twitter’s leadership is determined to complete the agreement at the price and terms agreed with Mr. Elon Musk and is planning to pursue legal action to enforce this merger agreement. We are confident of victory.

Tesla CEO Elon Musk.

Experts believe that it is difficult for Musk to withdraw from the deal easily without suffering the consequences.

Musk is unlikely to win in court

Transaction contracts are designed to provide certainty to the seller, including many safeguards to promote the deal and prevent material adverse consequences (MAE).

Musk’s negotiating team said they could not verify the social network’s statistics on fake accounts.

`Basically, the agreement signed here is considered completed, unless there is government involvement or unusual events during the signing and implementation phase. Musk’s statement is unlikely to bring a legal victory

Twitter’s lawyers also outlined a list of events that cannot change the agreement, including market conditions, natural disasters, Covid-19 and possible pandemics, and political issues.

Renegotiate

`Twitter has a reason to activate renegotiation,` commented finance professor Chester Spatt, a former financial expert at the US Securities Commission (SEC).

However, some observers are skeptical about the possibility of renegotiation, especially when Twitter is unwilling to lower the price compared to the $44 billion figure initially offered by Musk.

Compensation of one billion USD

There’s always the possibility that Musk will cancel the deal.

`I’m sure he hired many lawyers at very high prices to find ways to circumvent the terms of the agreement,` Spatt said.

Twitter can sue Musk for $1 billion in compensation to end the deal.

However, Twitter can still sue to force Elon Musk to implement the agreement, based on the `specific performance` clause that requires the parties to do what they say they will do.

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