Entertainment

The next 8 scenarios for the Elon Musk deal – Twitter

The next course of the deal is said to be very unpredictable, but CNBC still offers 8 scenarios for the strangest acquisition in American history.

In the latest development of the Elon Musk-Twitter deal, the world’s richest man has just announced that he no longer intends to acquire the social networking platform. In response, Twitter President Bret Taylor immediately confirmed that he would file a lawsuit against the Tesla CEO based on previously agreed terms. The next step is said to be very unpredictable, but CNBC still offers 8 scenarios for the strangest deal in American history. 

Agreement terminated, Musk pays compensation fee

In theory, this could be the gentlest scenario for both sides. The only thing Elon Musk needs to do is pay the $1 billion compensation fee and Twitter will function as usual. This is also the path that Twitter co-founder Ev Williams implied in a tweet that read, “Can we let this terrible movie end?”.

Unfortunately, however, the board could be in breach of its fiduciary duty if this scenario were to happen, and Twitter doesn’t appear to intend to do so.

1660187305651211538

Elon Musk

According to Twitter, Musk himself set a price of 54.20 USD/share for the deal and his acceptance of the canceled deal with only 1 billion USD in compensation could cause Twitter’s share price to fall even further.

According to Ann Lipton, a professor of corporate governance at Tulane Law School, Twitter’s board is in a very difficult position. “They can’t just say, ‘Okay, leave us alone. We will allow you to lower the price to $20 per share, or agree to receive a compensation fee.” I mean, Twitter’s position can’t help it do that.”

Twitter social networking platform

Twitter won the lawsuit, Elon Musk was forced to buy the company

According to CNBC, there is still a possibility that the court can force Elon Musk to buy Twitter even if he does not want to. 

Prior to that, in 2001, the Delaware Chancery Court ordered Tyson Foods to buy IBP Inc., then the largest US beef distributor, at a previously agreed price of $30 per share. promissory note. Tyson then tried to pull out of the deal due to bad business, similar to how Musk wanted to quit Twitter. However, Tyson was then forced to buy back IBP for $3.2 billion. 

1660187306120370383

Twitter social networking platform

Twitter wins lawsuit, Elon Musk pays damages

According to law professor Morgan Ricks, the court may allow Musk to pay damages instead of exercising the right of redemption. Another opinion is that Musk can make the ownership transition because he no longer wants to own Twitter. At that point, the total damage to the collateral would be “terrible.”

Musk agrees to deal with Twitter

In this case, Musk would likely pay $1 billion in compensation and billions of other dollars in a brokerage settlement with Twitter. This amount must be large enough to satisfy investors, thereby stopping them from suing. 

Musk wins lawsuit, no compensation fee

If Musk can prove that Twitter has provided a lot of false and unfavorable information, the Tesla CEO can terminate the agreement without paying compensation fees. Earlier, in a statement explaining the reason for the termination of the agreement, Musk asserted that Twitter had failed to comply with its contractual obligation to provide information. 

1660187306706436975

Elon Musk

Elon Musk changed his mind

In just a few months, Musk agreed to join the Twitter board and withdrew the decision, then agreed to a deal to take over Twitter and then “turned the car around”. 

There is no guarantee that Elon Musk will not change his mind, so the statement of not making the transaction can be withdrawn at any time.  

Musk and Twitter agree a deal for a lower price

For the past several months, Elon Musk has been trying to lower the price of Twitter stock. The possibility of Musk agreeing to buy back the platform at a lower agreed-upon price is still possible, however, with a very low probability.

Someone else will buy Twitter

This may be the most unlikely scenario, but it does exist.

Theo: CNBC 

Từ khóa

I'm a big fan of football.

Back to top button