Elon Musk finally agrees to buy Twitter

Elon Musk finally agrees to buy Twitter

Lawyers for both sides agree on the terms of a settlement that will avoid a trial. DADO RUVIC / REUTERS

The price of $54.20 per share of Twitter, set by the billionaire in April, was agreed by both parties on Tuesday.

Correspondent in Washington,

Elon Musk preferred to turn around again rather than risk losing the court. The unpredictable industry has finally decided to follow through on its promise made in April to buy Twitter for $44 billion. It is worth respecting the price of $54.20 per share of Twitter, adopted in April by Elon Musk. The surprise sent the group’s shares jumping 22% on the Nasdaq on Tuesday. Twitter’s price, up to $52, now reflects the belief of a long-skeptical market that the initial transaction will happen.

Lawyers for both sides are negotiating the terms of a settlement that would avoid a trial that had been scheduled to begin Oct. 17 in Delaware Court of Chancery, a court that specializes in corporate acquisition disputes. It was before this body, known for its swift decisions and highly adverse case law against business buyers who changed their minds, that Twitter hauled Elon Musk into in July to force him to honor his expensive commitment. In recent days, during the preliminary phase of the trial, Judge Kathleen McCormick has already ruled several times in favor of Twitter’s lawyers on various procedural points.

The burden of proof was very high for Elon Musk. First, he had to demonstrate that Twitter had deliberately inflated the number of users on its platform. He then had to prove that the ruse had a sufficiently material material effect on the company’s valuation to invalidate the terms of the acquisition. However, according to Twitter’s lawyers, two experts hired by Musk to estimate the proportion of fake accounts opened on the social network made conclusions insufficient to establish fraud. It could be assumed that 5.3% of the accounts were fake. The second would set the bar at 11%. Twitter, for its part, has always maintained that less than 5% of its users were actually bots.

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The uncertain future of Twitter

If Elon Musk does become the owner of Twitter, at the initially agreed high price, the management of the Californian group will have a surprising victory. For months, Elon Musk has been fiercely critical of his leadership, how it protects Twitter’s private data, its criteria for tweet censorship, and its reliance on advertising revenue. It is hard to imagine how Parag Agrawal, the boss of the firm in San Francisco, will be able to stay put.

The plans for Twitter of the billionaire, who is already the boss and founder of the car maker Tesla and the space transportation company SpaceX, are not very clear. While the chain’s financial results have been disappointing, to the point where the company posted a loss in the second quarter, the morale of its teams has taken a hit due to the dispute between its buyer and the incumbent leaders. Twitter is famous in the world of media and politics, but only has 238 million monetized daily active users, which remains marginal compared to Facebook’s 2 billion daily users.

Before abandoning his promise to acquire, Elon Musk expressed his intention to more than double the number of Twitter users by 2025. A moody libertarian who likes to speak out on all sorts of topics and has 107 million followers online, he wants to make Twitter “World Forum of Freedom of Speech“. It was on this platform that he proposed the scheme on Monday “peace planbetween Russia and Ukraine… before President Zelensky’s criticism, while, on the contrary, the Kremlin characterized the initiative as “very positive“.

The captain of industry also criticized Donald Trump’s ban on tweets from January 8. He advocated a subscription-based business model. It is also considering offering money transfer services to Twitter users. Elon Musk is known for his innovative audacity, but to date he has not presented a plan to revive the company he is about to buy at a high price.

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