Along the way, Musk has used his Twitter account – which now boasts nearly 108 million followers – to mock the company, critique its products, attack its executives and keep the world guessing about what he’d do next.
The billionaire began buying Twitter shares in January. By spring, he’d become its biggest individual shareholder, but delayed notifying regulators or the public until early April. At that point, he told Twitter he saw three options: join its board, buy the company and take it private, or start a competing social network, according to Twitter’s lawsuit.
After accepting and then reneging an invitation to join the company’s board, Musk made an unsolicited offer to buy Twitter for $54.20 a share, or about $44 billion.
Twitter initially resisted, adopting a so-called “poison pill” to slow down Musk’s advances and give the board and management time to evaluate his offer against other prospects. Musk started tweeting veiled references to making a tender offer directly to Twitter shareholders to get his way.
Finally, Twitter agreed to sell to Musk in late April. The company and Musk signed a deal in which Musk waived any further due diligence, pledged tens of billions of his own money, and promised not to use his Twitter megaphone to disparage the company. The deal included another important protection for Twitter: it said if Musk tried to back out, with few exceptions, the company could take him to court to force him to complete the purchase.
Musk’s change-of-heart led to high-stakes legal battle, with trial scheduled for this month
The ink was barely dry on the agreement when Musk began suggesting he had cold feet. When he struck the deal, he said one of his goals in owning Twitter was to clean up its longstanding problems with spam and automated bot accounts. Soon, he began saying he didn’t want to buy Twitter because of the bots – and accused the company of misleading him and the public about the scale of the problem. (Twitter has for years said it estimates about 5% of daily users are not real people.)
In early July, he announced he was terminating the deal, citing his concerns over Twitter’s user numbers and his allegations that Twitter deceived him. Twitter hit back two days later with a lawsuit seeking to hold Musk to the terms of the sale.
Twitter accused Musk of suffering from buyer’s remorse, noting that the stock market rout since the deal was signed made the price Musk had agreed to pay look high and dented the value of his Tesla stake – his primary source of wealth.
The company argued Musk’s claims about bots were irrelevant to the question of whether he broke the legal agreement, which made no mention of how many accounts on Twitter aren’t real.
Indeed, Musk amended his legal argument in August, after Twitter’s former security chief filed a federal complaint contending Twitter was putting users’ privacy and sensitive company information at risk through lax security practices. (Twitter has called the allegations inaccurate, inconsistent and opportunistic.)
Musk’s reversal comes after an unusually eventful discovery phase of the case, in which attorneys for both sides filed more than a hundred subpoenas and took dozens of depositions.
Internal emails and texts were beginning to pour out of the case, including a cache of Musk’s texts in which some of the richest, most powerful, boldface names in Silicon Valley begged to get in on the deal, handed out free advice and generally kissed up to him.
Musk is scheduled to sit for a deposition this week. A five-day trial is slated to begin Oct. 17.
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