October 5, 2022 – Tesla CEO Elon Musk has potentially averted the high-profile legal trial with Twitter by proposing to revive his $44 billion deal to acquire the social networking firm. Musk was taken to court by the company after he backed out of the deal in July.
The development comes just weeks before Musk and Twitter were scheduled for a showdown in the Court of Chancery in Georgetown. Musk proposed his plans to go ahead with the deal on original terms (agreed upon on April 25) if proceedings were stayed, according to a regulatory filing. Twitter released a statement acknowledging Musk’s letter, saying, “The intention of the Company is to close the transaction at $54.20 per share.”
Musk announced putting the acquisition on hold on May 13, saying that he was seeking details in support of a calculation regarding the number of spam or bot accounts on Twitter. He dismissed the company’s claim that only five percent of total accounts on the platform were fake. The deal was officially dropped on July 8 after a series of speculative reports on the billionaire’s plans to walk away from the acquisition. He was subsequently sued by Twitter, which accused him of making “bad faith” arguments and “public and misleading attacks” against the platform, and called Musk’s exit strategy “a model of hypocrisy”.
Before the deal was revived, there were reports that another whistleblower was expected to appear at the scheduled trial to talk about bots on the platform. Twitter was already rattled at a congressional testimony last month by the explosive revelations of a former security chief turned whistleblower, Peiter Zatko, who went public with his complaint on August 23.
He accused Twitter executives of misleading users and investors regarding the alleged vulnerabilities in the security infrastructure that allowed sensitive user data to be widely accessed by staffers at the firm. He claimed that Twitter had been forced to employ an Indian government agent who, owing to basic security flaws, would have access to vast amounts of sensitive information. According to the report, the second whistleblower would have focused on “an alleged internal study concluding that the site’s bot problem is much larger than Twitter has acknowledged”.
Musk’s earlier promise to promote free speech on Twitter after its privatisation already raised concerns from experts, who said the takeover would not be a “free speech rights victory”.
