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FTJul 09, 2022
The Facts
On Tues., Twitter filed a lawsuit against Elon Musk to force him to close a deal accepted in April to take over the social media platform.
This comes in response to Musk's Fri. announcement that he plans to end the $44B agreement over allegations that Twitter has failed to fulfill its contractual obligations by not providing verifiable data on its spam accounts.
The Spin
Narrative A
Musk has given Twitter ample warning that the deal was in peril if the bot issue wasn't resolved. Twitter has not only failed to provide sufficient information on the number of bot accounts, but made false and misleading representations. Besides, the company has also failed to "conduct business in the ordinary course" as obligated through its recent hiring freeze and layoffs. Given Twitter's material breach of multiple provisions, Musk is entirely within his rights to walk away.
Narrative B
Musk has been setting the stage for this since he first signed the agreement. If he were truly unhappy about the Twitter bots, he should've investigated this before committing to the deal. Twitter has gone to great lengths to comply with all of his requests, and this is simply an excuse to rescind on his end of the deal after a recent slide in tech valuations. Either way, Musk will have to prove Twitter breached the agreement before he can break off his bid.
Nerd narrative
There is an 25% chance that Elon Musk will acquire over 50% of Twitter shares by the end of 2022, according to the Metaculus prediction community.
