Fighting the Law: Why Elon Musk’s Twitter Takeover Ended in a Legal Battle
Ever since the world’s richest man took over the social media site Twitter in October 2022, the weeks that have followed have seen a chaotic response from employees and commentators.
Numerous layoffs and reports of difficult conversations have led to growing doubt around the future of the site under Tesla and SpaceX CEO Elon Musk, especially after its acquisition came as part of a lengthy legal battle. But what exactly led to the lawyers getting involved?
Where It All Began
Back in April 2022, Elon Musk sensationally announced that he had purchased over 9% of Twitter’s shares on the open market. As a powerful public figure, this sent shockwaves around the social media scene, and Twitter responded by offering him a seat on the board.
After declining, Musk made an open offer to buy the company for $54.20 a share, stating his intention to transform Twitter as a private company with free speech at the heart of unlocking the site’s ‘extraordinary potential.’
On 25th April, Twitter accepts Musk’s offer. Initially, it seemed as though the deal would be completed fairly quickly, but soon, cracks began to show in the multi-million-dollar takeover agreement.
Heading for Trouble
Shortly after Twitter’s acceptance of the offer, Musk announced that he was placing the deal ‘on hold,’ due to what he considered to be a large number of spam or bot accounts that existed on the platform.
Most of the world’s biggest companies have in-house legal representatives, and for businesses small and large, comprehensive and professional legal services insurance is in place to secure the advice they provide and protect companies through situations like this one.
Twitter was no stranger to legal practice and responded with their intention to close the deal and enforce the merger agreement – after all, Musk had already agreed to the $54.20 per share transaction that he’d proposed a month earlier. After unsuccessful discussions that were heavily reported by the world’s media outlets, Twitter went on to sue Musk.
The Final Verdict
Despite Musk’s announcement of a countersuit against Twitter, in which he accused the company of fraud, the trial began and saw both sides clash dramatically over not only the future of the website but also of the employees who may ultimately face job cuts and redundancies.
After lengthy conversations, a judge halted the case and gave both parties a deadline of October 28th, 2022 to complete the deal, on which date the acquisition was finalized and Musk took over the company.
But what does Musk’s Twitter takeover mean for Twitter users and employees? In the weeks that have followed the closing of the deal, the company has seen hundreds of layoffs, the introduction of a controversial blue tick subscription offers and dramatic commentary on both sides of the fence – those who promote Musk at the helm, and those who feel that his takeover spells the end for the platform.
Ultimately, the legal battle that was fought over the agreement simply shows the need for businesses small and large to have a clear legal position, as well as legal services insurance, for the unexpected events that can see companies spiraling without warning.