On Tuesday, Twitter investors gave Elon Musk the green light to acquire the business for $44 billion and take it private.
Preliminary results from Tuesday’s vote revealed that most Twitter shareholders favored accepting Musk’s $54.20 per share bid to purchase the social media giant. After making the offer in April, Musk tried to back out. The Twitter board and two major consulting firms pushed for shareholders to approve the transaction. After the vote, shares of the firm hardly moved, closing at $41.74, which is much lower than recommended price.
The voting portion of the special shareholder meeting that was called to do the count lasted 7 minutes. Twitter sent out many reminders to investors to cast their ballots early in the weeks leading up to the annual meeting.
While shareholder consent was necessary for the acquisition to close, its conclusion is uncertain. Elon said in July that he was terminating the arrangement because he felt Twitter had misled him about the size of the company’s user base and the prevalence of bots and spam accounts. Despite Musk’s claims to the contrary, Twitter has filed a lawsuit in Delaware state court to compel him to finish the transaction. After the corporation sued him back, Elon’s filed a countersuit.
The majority of shareholders, or 98.6 percent, reportedly approved the transaction. Musk, Twitter’s biggest shareholder, reportedly didn’t cast a single vote, as confirmed by two sources with knowledge of the situation. When E-Musk agreed to purchase Twitter, he controlled roughly 10% of the firm or more than 73 million shares.
E-Musk, who has thrown doubt on Twitter’s self-reported number of false accounts and accused the firm of not being as helpful as it should have been with its calculation explanations, is now seeking to cancel the transaction, which prompted the vote. Twitter has supplied Musk with enough material to satisfy the conditions of the arrangement and has stuck by its claim that fewer than 5% of marketable daily active users are spam or false.
Twitter Lawsuit mentioned that “E-Musk believes that he – unlike every other party subject to Delaware contract law – is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away,”
Twitter Musk Deal background
In April, Twitter’s board of directors unanimously approved a $44 billion purchase from Elon, a move that has been met with criticism and doubts about the platform’s handling of free speech and disinformation.
Musk’s attorneys attempted to rescind the acquisition several months later, claiming that Twitter had ignored or flat-out denied their demands for information about “spam bot” profiles, which they said were crucial to the company’s success.
Current estimates place Twitter’s valuation at $32 billion, far lower than Mr. Elon’s $44 billion bid.
Twitter’s shareholders have given the business the go-ahead to continue pursuing Mr. Elon in court, even though today’s vote could potentially stop the company’s legal battle.
The court date in Delaware state has been scheduled for October. At the hearing, the court will rule on whether or not Mr. Elon is required to make the purchase.
Before the shareholder vote, the Twitter employee turned whistleblower Pieter Zatko testified about supposed security issues in front of the Senate Judiciary Committee.
Musk and Twitter’s attorneys in San Francisco have been at odds for weeks about who will testify and what evidence will be presented. Delaware Chancery Court has scheduled the trial to begin the week of October 17. From Twitter’s vantage point, He didn’t need anything more than the shareholders’ approval of the transaction to close the sale. He disagrees and has requested further information from the firm.
Recent attempts by Musk to support his argument have included using facts made public by a former top Twitter official turned whistleblower just at the end of the month. Twitter’s former head of security, Peiter “Mudge” Zatko, claims that the firm is in breach of various legal obligations, has sloppy security methods, and has provided false data about the prevalence of bots on the platform.