Elon Musk finally agrees to buy Twitter

Elon Musk finally agrees to buy Twitter

Lawyers for both sides are negotiating the terms of a deal that would avoid trial. GIVEN RUVIC/REUTERS

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

Washington Correspondent,

Elon Musk preferred to turn around again, rather than risk losing a trial. The unpredictable industrialist finally chooses to honor his promise made in April to buy Twitter for $44 billion. He must respect the price of $54.20 per share of Twitter, accepted in April by Elon Musk. The surprise sent the group’s share price up 22% on the Nasdaq on Tuesday. Twitter’s price of up to $52 now reflects a long-time skeptical market’s belief that the initial transaction will happen.

Lawyers for the two sides are negotiating the terms of a deal that would avoid a trial that was due to begin Oct. 17 before the Delaware Court of Chancery, a court specializing in disputes involving company acquisitions. It was before this body, known for its quick decisions and its very unfavorable jurisprudence regarding business acquirers who change their minds, that Twitter dragged Elon Musk in July to force him to maintain his expensive commitment. In recent days, during the preliminary phase of the trial, Judge Kathaleen McCormick had already ruled several times in favor of Twitter’s lawyers on various procedural points.

The burden of proof was very high for Elon Musk. He first had to prove that Twitter had deliberately overestimated the number of human users of his platform. He then had to show that this subterfuge had a significant enough material impact on the company’s valuation to invalidate the terms of the acquisition. However, according to Twitter’s lawyers, the two experts hired by Musk to estimate the proportion of fake accounts opened with the social network, drew insufficient conclusions to establish traps. 5.3% of the accounts would have been judged to be fake. The other would have set the bar at 11%. Twitter for its part has always argued that less than 5% of its users were actually robots.

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Uncertain future for Twitter

If Elon Musk does indeed become the owner of Twitter, at the initially high price agreed, the Californian group’s management will have won a rare victory. For months, Elon Musk has harshly criticized his management, the way he protects the private data of tweeters, his criteria for censoring tweets, as well as his dependence on advertising revenue. It’s hard to see how Parag Agrawal, the boss of the San Francisco firm, will be able to keep up with him.

The plans for Twitter of the billionaire, who is already the head and founder of the carmaker Tesla and the space transport company SpaceX, are not very clear. While the network’s financial results are disappointing, to the point that the company posted a loss in the second quarter, the morale of its teams has been greatly affected by the dispute between its acquirer and the leaders on the ground. Twitter is famous in the world of media and politics, but it has only 238 million monetizable active users on average each day, which is still marginal compared to Facebook’s 2 billion daily users.

Before retracting his purchase promise, Elon Musk advanced his intention to more than double the number of Twitter users by 2025. The capricious libertarian, who loves to express himself on all subjects, and has 107 million followers on the network fans, he wants to do Twitter”the world forum on freedom of expression“. It is on this platform that he proposed on Monday the scheme of a “peace planbetween Russia and Ukraine… before being criticized by President Zelensky, while on the contrary the Kremlin called the initiative “very positive“.

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

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