Eccentric billionaire Elon Musk has decided he does want to buy social media company Twitter, having spent months apparently trying to get out of it.
An SEC filing made on behalf of Musk by his excellently-named law firm Skadden, Arps, Slate, Meagher & Flom, of a letter addressed to Twitter’s army of lawyers, appears to confirm this latest U-turn. Somewhat contentiously it starts with the greeting ‘Gentlemen’, despite there being at least three women on the list of recipients. The concise missive goes on to declare the following.
‘…we write to notify you that the Musk Parties intend to proceed to closing of the transaction contemplated by the April 25, 2022 Merger Agreement, on the terms and subject to the conditions set forth therein and pending receipt of the proceeds of the debt financing contemplated thereby, provided that the Delaware Chancery Court enter an immediate stay of the action, Twitter vs. Musk, et al. (C.A. No. 202-0613-KSJM) (the “Action”) and adjourn the trial and all other proceedings related thereto pending such closing or further order of the Court.’
It can be tough to unpick the legalese in things like this, but the insistence on the ongoing court case being immediately stopped is intriguing. We are nearing the time when Musk himself would have to testify, which could prove awkward for him. So an easy conclusion to come to is that he feared being put in that position so much that he would rather hand over billions of dollars for a company he had previously claimed to no longer want.
Twitter issued a perfunctory tweet acknowledging receipt of the letter and Musk took to the platform to offer his spin on the development.
The company Musk is using for the acquisition is called X Holdings and he seems to be a fan of that letter. His rocket/satellite company is called SpaceX and one of his first ventures was an online banking startup called X.com. He reacquired that URL back in 2017 and it seems he plans to use it as the home of some kind of multipurpose app along the lines of WeChat in China.
As ever it’s hard to know what is really going on in Musk’s head. He seems to have always had bigger plans for Twitter beyond merely restoring its focus on free speech, so it’s hard to understand why he was then so keen to get out of it. Maybe he was just trying to reduce the amount he has to pay Twitter shareholders, in which case the Twitter board seems to have done a good job of calling his bluff.
By now nobody will believe the deal is done until Musk has paid up and been given the keys to Twitter towers. If it does go through, the prospect of a free speech platform combined with a bunch of other novel e-commerce features is an intriguing one. The process of creating this ‘super app’ won’t be straightforward, however, so Musk had better warn his fellow Twitter investors that they will need to be patient.
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Tags: apps, Elon Musk, featured, M&A, Twitter
