Musk’s About Face: Tells Twitter He’s Now Planning To Move Forward With The Purchase

So this was unexpected (well, perhaps not that unexpected) but Elon Musk sent a letter to Twitter last night stating he now intends to move ahead with the original deal to buy Twitter, with no changes to the terms.

Gentlemen:

On behalf of X Holdings I, Inc., X Holdings II, Inc. and Elon R. Musk (the Musk Parties"), we write to notify you that the Musk Parties intend to proceed to closing of the transaction contemplated by the April 25, 2022 Merger Agreement, on the terms and subject to the conditions set forth therein and pending receipt of the proceeds of the debt financing contemplated thereby, provided that the Delaware Chancery Court enter an immediate state of the action, Twitter v. Musk, et al.... (the Action") and adjourn the trial and all other proceedings related thereto pending such closing or further order of the Court.

The Musk Parties provide this notice without admission of liability and without waiver of or prejudice to any of their rights, including their right to assert the defenses and counterclaims pending in the Action, including in the event the Action is not stayed, Twitter fails or refuses to comply with its obligations under the April 25, 2022 Merger Agreement or if the transaction contemplated thereby otherwise fails to close.

Separately, Musk filed with the SEC about the letter he had sent.

What does this all mean? Well... there's a shit ton of speculation, but not much is actually known.

This does make it significantly more likely that Musk will in fact own Twitter outright in the very near future. But it's not a sure thing. Some are arguing that it's just another stall tactic, which it could be - but if that's true, Chancellor McCormick seems likely to rip Elon's brain out of his skull and forcefeed it to him (metaphorically speaking).

I joked that he was paying $44 billion to avoid more of his embarrassing text messages from coming out in the discovery process. But a few people suggested there might actually be something to that: mainly in that he was getting pressure from his friends and financiers to make this go away so they don't get further embarrassed. That could be, but honestly, if that were the case, I'd think he'd have been better off offering to settle with Twitter for $10 billion and getting out of the entire mess for cheaper.

Another, perhaps more realistic, issue is that in just a couple of days Musk was scheduled for a two day deposition by Twitter's lawyers in the case. Given what we've seen in the case already, with Musk constantly trying to mislead the court and multiple bits of discovery being used to prove it, there was a good chance that the deposition was going to go very, very, very badly for Musk. It's quite likely his own lawyers were well aware of that and may have finally gotten that across to him.

As the always excellent Chancery Daily notes, this is not over yet. Twitter can't just assume that because Musk says now he'll complete the deal he'll actually complete the deal. He's already proven quite clearly that you can't take him at his word on a binding contract. So it seems likely that Twitter is rushing to put in place some fairly ironclad locks that are the legalistic equivalent of if you fuck around again, you're going to find out so bad you'll to wish you'd never heard of Twitter." And Twitter has the legal team to do that.

Here's Twitter's statement on the matter, which may be the most expensive tweet in history if you count the legal billing hours that presumably went into reviewing it before it went out:

Twitter issued this statement about today's news: We received the letter from the Musk parties which they have filed with the SEC. The intention of the Company is to close the transaction at $54.20 per share.

- Twitter Investor Relations (@TwitterIR) October 4, 2022

This is exactly what the company line should be. It's the same line the company has been using since the beginning of this mess, and if it doesn't want to get in trouble, it needs to keep the same message like that going forward.

But I can guarantee that an army of lawyers are scrambling in the background to figure out how all of this works and how to lock it all down.

My guess (and it's purely a guess) is that this does lead to Elon owning Twitter. They will sign some sort of much-more-strict deal that leaves basically no room for Elon to wriggle out of it. He'll have a month or two to collect up whatever money he was promised from others, and then... it'll become Elon's Twitter.

Just in time for the Supreme Court to tell him he's now guilty of providing material assistance to ISIS. On that note, someone tell Elon and his fans that now might be a good time to start supporting Section 230.