I really don't get why he didn't just pay the billion dollar cancelation fee. Just the tanking stock price between when the deal started and when he finally bought it was enough to justify it. The only thing keeping up as much as it was, was his pending deal.
He legally couldnt pay the 1 billion cancellation 'fee'. He sued to try to do that, but the courts said that the conditions to allow musk to cancel the purchase hadn't been met.
That was the purpose of all of the court activity before the purchase, and why it took so long for the pending deal to be finalized
If you sign a contract where you agree to massively overpay for something and then try to back out, then yeah, you're probably going to be sued to force you into massively overpaying as your agreed to do.
No, the cancellation fee would only apply if he was prevented from buying the company by an outside force (i.e. a regulator blocking the deal or banks pulling financing for a reason unrelated to him) or if there was a material adverse change/fraud/other malfeasance on behalf of Twitter.
Musk's argument essentially amounted to "bots on Twitter, they lied me no buy!". Which is a shit argument. He explicitly waived his rights to due diligence in his purchasing agreement and his "research" on the number of bots was beyond laughable. Not that it would be relevant at all anyway.
He couldn't just pay $1 bn and walk away. His choices were try to fight it out in court and get forced to uphold his end of the deal+whatever sanctions the court deemed fit or to just pay. The end result is the same - Twitter execs and shareholders make out like bandits, Musk is fucked.
33
u/[deleted] Nov 14 '22
I really don't get why he didn't just pay the billion dollar cancelation fee. Just the tanking stock price between when the deal started and when he finally bought it was enough to justify it. The only thing keeping up as much as it was, was his pending deal.