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Everything we know about Elon Musk's new Twitter offer

Everything we know about Elon Musk's new Twitter offer

Elon Musk has changed his mind again: He really wants to buy Twitter. This, after months of drama! He indicated his intention in a new filing with the Securities and Exchange Commission -- but there's a catch: Twitter will have to drop its lawsuit.

We understand if you have questions about the entire situation; Honestly, we do too. So we spoke to some legal experts in the hope that we would at least have a fighting chance to provide some answers. Let's join.

First of all, how did we get here?
Breath. It all started when Musk announced his purchase of a 9.2 percent stake in Twitter in April 2022. Twitter immediately offered Musk a seat on the company's board of directors, an offer Musk accepted before changing his mind about a week later.

Cause of change of heart? If Musk is to remain on the board, he will not be able to acquire a stake larger than 14.9 percent. He also hinted that tweeting about how Twitter sucks would be giving up his pastime. So, Musk's brilliant solution to this puzzle was to buy out all of Twitter in a deal valued at $44 billion.

Things went downhill from there. Musk soon took to Twitter to accuse him of not providing enough information about the number of spam bots on the platform, then claimed this was reason enough for him to back out of the deal altogether. Twitter (understandably) didn't take much pity on him and hit back at Musk with a lawsuit demanding that he close the deal.

Twitter and Musk were set to fight it out in court on October 17th, but in typical Musk fashion, on Tuesday, he decided he would go through with his deal to buy Twitter for $54.20 per share. - If the judge adjourns the hearing to oversee the trial.

So why doesn't Musk want to cancel his deal anymore?
We can't go inside Musk's brain to find out for sure (and frankly, we're not sure we will), but there are a few things that might make him change his mind.

First, the pretrial discovery process revealed some embarrassing text messages showing how the deal went and Musk investing in Twitter, saying the only way to fix it was to end it.

Musk probably knows that things can go awry in testing. As Eric Talley, a law professor at Columbia University, told The Verge, Musk was facing "a very distasteful statement" that could potentially end with "extremely inconsistent statements" that and Could also lead to more legal issues. It also doesn't help that Musk's case against Twitter essentially hinges on publicizing bad things about the same company it can acquire.

Musk's only public statement on the matter has been a tweet saying that buying Twitter is the first step in "making X, the Everything App." This is a reference to China's WeChat, a hugely popular app that started life as a messaging service but later expanded to include a variety of other functions, from gaming to social media and shopping. Gone. Musk has said in the past that he wants to turn Twitter into WeChat. "You basically live on WeChat in China," he told Twitter employees in June. "If we can recreate this with Twitter, we'll have a huge success."

Interestingly, WeChat also includes payment services -- and was the name of the online bank that Musk co-founded and would eventually become PayPal.
Will the deal happen?
Honestly... who knows? Musk has confirmed his offer in a filing with the SEC, and Twitter has said that he intends to "close the transaction at $54.20 per share." This has been more or less his stance as Musk has previously said that he wants to exit the deal, so it is not necessary that he agrees to the new offer.

Ann Lipton, professor of business law at Tulane University, told The Verge that "it's hard to tell how much commitment Musk's filings with Twitter hold up to his court hearing." “But it would be strange for him to publicly file with the SEC if he was not really interested in settling – otherwise there would be some serious securities fraud,” she said. (Securities fraud? Musk? I can't imagine.)
If the deal goes through, who will own Twitter?
The direct answer is Elon Musk, but there are some nuances here. From a legal standpoint, all of Twitter's publicly traded stock is being purchased by a holding company that, according to an SEC filing, is "wholly owned" by Musk. (Several other holding companies are also involved in the deal, but they will mostly turn to Twitter.)

While Musk won't have to answer to public shareholders such as Twitter, outside firms and people who have historically invested or signed billions in deals, including Binance, Oracle founder Larry Ellison, Saudi Arabia's Prince Alwaleed bin Talal bin. Abdulaziz Alsaud, and Andreessen Horowitz. You can see the full list, including how much each unit has invested, in this Wall Street Journal report. Musk promised him a return on his investment, and the Washington Post suggested he wanted to take some control of the platform, too.

The second question is who will actually run Twitter from day to day. Earlier this year, reports surfaced that Musk would be temporarily in charge of the company after the acquisition, ousting current CEO Parag Agarwal. While Musk hasn't publicly said what will happen, it doesn't look like he'll maintain his position for Agarwal; The two have been publicly fighting for months, and Musk's recently publicized texts suggest he was disappointed with Twitter's leadership.

Whether Musk still intends to serve as the company's CEO or whether he intends to replace him is really anyone's guess.

Wait... what about the October 17th Test?
It's a little high in the air right now. Tally said the trial "is not going to stop the dead in their tracks, it will continue" and that he would indicate to the judge whether he would allow anything to be settled in time. “The machinery is still up for testing on October 17th,” he said, adding that things like deposits will continue until the deal is actually done.

Didn't Musk say he wanted the lawsuit dropped?
Well, yes, but Twitter would have to agree to it - and Tally doesn't think the deal will be done until October 17 for sure because he doesn't want to kick the football like Charlie Brown. "I highly doubt they will agree to stay on everything. Nor, for that matter, the chancellor, who has set his schedule around the trial date set months ago," he said.

He added that "an item or two may be delayed by a few days," including Musk's statement, but "Team Twitter is planning pretty much like this test is going to happen." He said the impending test would also serve as a stick to prevent Musk from delaying his settlement efforts.

The Wall Street Journal reports that the judge has asked Musk and Twitter to come up with a plan that would put the trial on hold until the end of the day, but we'll have to see if anything comes up.

When will all this end?
At this point, it's not entirely clear how long it will take for the deal to actually close. There is, however, a crucial deadline in April 2023, when Musk's funding agreement will expire. If he doesn't close the deal or renegotiate those agreements by then, chances are the whole thing could fall apart — potentially leaving him on the hook for billions of dollars in breakup charges. What will this mean for Twitter... well, it will be a billion dollars more prosperous, which is good, but it will have to remain a public company and figure out how to move on after a year of chaos and His name was dragged. in the mud.

As for other things that could move the deal? Looking at the work we are doing, it seems like anything can happen; Musk could suffer the wrath of the SEC, Twitter could accidentally admit something terrible in court, aliens could invade because SpaceX was going really loud with its rocket launch. What we're trying to say is that this deal isn't over until it's over.

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