Musk has made an offer to extend the company, but Twitter thinks he should buy on his original terms
A judge has postponed a lawsuit between Twitter and Elon Musk, giving the Tesla CEO more time to finalize his $44 billion (£39 billion) deal to buy the company after struggling to get out of it for months.
Musk had requested a stay of proceedings in the upcoming Delaware court hearing, which was expected to see the Tesla billionaire fare poorly against Twitter’s lawsuit forcing him to end his April merger deal.
Musk revived his takeover bid on Monday (October 10) after originally withdrawing from the deal over the summer, but said he needed more time to secure the funds.
Here’s everything you need to know about it.
What’s the deal with Musk’s offer to buy Twitter?
In April, just days after it was announced that Tesla and SpaceX CEO Elon Musk had bought a 9% stake in Twitter, the billionaire offered to buy the social media platform outright.
But Musk backed out of the deal over the summer, accusing Twitter of refusing to give him information about “spam bot” accounts on the service.
An unfortunate Twitter countered with a lawsuit against Musk — should he lose that case, he’d be forced to go through with his original deal, whether he likes it or not.
He has now told the social media platform that he is willing to buy the company again, but claims the San Francisco-based company is refusing to accept his renewed offer.
Twitter reiterated in a statement that it was ready to close the deal at the share price agreed in April: “We look forward to completing the transaction by October 28 at $54.20,” referring to the price that Musk originally offered for every Twitter share.
Musk’s attorney, Alex Spiro, said in a statement that “Twitter offered Mr. Musk billions in rebate on the transaction price,” but Musk “declined because Twitter attempted to attach certain self-serving terms to the deal.”
He didn’t elaborate on what those terms were, and Twitter didn’t describe the talks beyond what his lawyers said in court.
Why does Musk want to buy Twitter?
In April, alongside the announcement that Musk had bought a 9% stake in Twitter, it was also announced that he would be joining the board.
In a statement released after confirming his accepted offer, Musk said, “Freedom of expression is the bedrock of a functioning democracy, and Twitter is the digital marketplace where matters important to the future of humankind are debated.”
“Twitter has tremendous potential – I look forward to working with the company and the user community to unlock it.”
Who used to own Twitter?
There are many shareholders in Twitter Inc., so no single person owns the entire company.
It is a “public” company because its shares are available for anyone to buy on the stock exchange, while it would be a “private” company if owned by just a few individuals or groups.
According to the Wall Street Journal, the group with the largest stake is the Vanguard Group, an American investment firm that is among the largest in the world.
As of April 15, the Vanguard Group is believed to own 82.4 million shares of the company’s stock, or 10.3% of the company.
Musk is the company’s second-largest shareholder. With 73.5 million shares, he owns 9.2% of Twitter Inc.
The remaining shares are held by various financial institutions, including Morgan Stanley and BlackRock Inc.
What will Elon Musk’s Twitter look like?
Known for his belief in absolute freedom of speech, Musk has indicated that he doesn’t believe Twitter is living up to his principles on the matter.
But a change in Twitter’s policy, prompted by Musk, to relax language rules on the site could pose further problems for the company in an age of increasingly polarized online discourse.
In his statement, he said: “I [also] We want to make Twitter better than ever by expanding the product with new features that open source algorithms to increase trust, defeat spam bots and authenticate everyone.”
One expert said that Musk’s own history of tweeting could get in the way of the delicate balancing act of content moderation that Twitter is currently engaged in.
“Sowing the seeds to promote ‘free speech’ is one thing, but let’s not forget that Elon’s view of simply speaking out has historically been viewed as reckless by regulators,” said Dan Lane, Sr Analyst at investment and stock trading app Freetrade.
Musk previously ran into trouble with US regulators the Securities and Exchange Commission (SEC) over his own tweets after he was accused of violating trading rules when he tweeted about his business interests.
He has also been accused of tweeting misinformation about Covid-19 after posting in March 2020 that children are “essentially immune” to the disease.
Musk’s stance on free speech is shared by the likes of Donald Trump and a number of other right-wing politicians whose accounts have been banned for violating Twitter’s content rules but who claim to have been the victim of censorship.
Some believe a Musk acquisition could mean a return to the platform for Trump and others, but reintroducing those users would be a highly controversial move and could subject the company and its approach to moderation to further scrutiny.
Infamously, British caver Vernon Unsworth sued the Tesla co-founder after calling him “pedo guy” and “sus” (suspicious) on Twitter after the cave rescue in Thailand in July 2018.
Unsworth lost the case after Musk’s attorneys argued it was nothing more than a playground insult and not an allegation of pedophilia, which a jury agreed to.