New legal challenges could further affect Elon Musk’s Twitter takeover push


So the fifth week of the Elon Musk Twitter Takeover drama is coming to an end, let’s just check out how things are going.

Oh, that’s bad. There is nothing better to see here.

This week, as Musk maintains that its $ 44 billion takeover offer remains ‘on hold’ due to questions about the accuracy of Twitter’s claim that 5% of its active users are fake, Twitter itself has faced its own drama, linked to the takeover push.

Already losing several top executives directly or indirectly from the pending change of ownership (as well as the complete exit of former CEO Jack Dorsey from the company) Twitter is now facing a battle against its board members. Egan Durban of Silver Lake Partners Resignation from the Board After Twitter shareholders blocked his re-election.

There was Durban A Twitter board seat has been given in 2020, Followed a push by Elliott Management Group to buy Twitter shares, and removed Jack Dorsey from his CEO position. Elliott’s view was that Dorsey was performing poorly, and that it was partnering with Silver Lake to put pressure on the company to improve its bottom line, or to accept a change in management.

This has led Twitter to implement tough new revenue and growth targets, which it recently acknowledged are not on track to meet.

In addition to his work with Twitter and various other public companies, Durban was also a longtime ally of Elon Musk, and earlier this week, Twitter shareholders voted to stop Durban from being reappointed, a move that many saw as a statement of protest from Twitter investors. Different types.

But like all things Elon and Twitter, it’s not that simple – Twitter has itself today Durban refused to accept the resignation.

A. Statement to SECTwitter explained Durban’s board re-election was probably rejected by shareholders because he is serving on the boards of six other publicly traded companies. Durban has promised to take a step back from these other promises, which Twitter has said are enough to keep him on its team.

Such as Twitter:

“While the Board does not believe that the directorships of Mr. Durban’s other public companies will be a hindrance if such engagements continue, Mr. Durban’s commitment addresses the concerns raised by the five public company boards to reduce its board service commitments by the date of the remedy. About such engagements by stockholders. Accordingly, the Board concludes that it is not in the best interests of the Company to accept Mr. Durban’s tendered resignation at this time. ”

Why does Twitter want to keep Durban running? It’s hard to say – especially given that Mask mentioned he would look Skip the Twitter board If / when he owns the platform.

The inclusion of representatives of key investors, however, could ensure that Twitter maintains a stability when the deal goes south.

And there may be another key reason for maintaining the link between Twitter boards and masks.

On the other front, there are Twitter shareholders Elon Musk is considering a class-action lawsuit against him On his Twitter takeover push, based on allegations that Musk ‘violated California corporate law’ by commenting on his Twitter acquisition, he was effectively involved in market manipulation.

As reported CNBC:

In a possible breach, they claimed that Mask benefited financially by delaying the necessary disclosures about his partnership on Twitter and temporarily concealing his plans to become a board member on the social network in early April. Musk also snatched shares on Twitter, alleging that he had inside information about the company based on personal conversations with board members and executives, including former CEO Jack Dorsey, a longtime friend of Musk and Egan Durban, co-CEO of Silver Lake. , A Twitter board member whose firm had invested in SolarCity before acquiring Tesla. “

Maybe that’s why Twitter wants to keep Durban at home, because of its past dealings with Musk, which could help ease the deal or help shareholders in their class action.

Durban’s current involvement may not have any additional legal implications, but there may be some links between the two sides of the growing messy Twitter deal.

And yes, there is still a possibility that the mask takeover could not happen.

Musk himself has repeatedly and publicly promised that he will not pay for the company unless it convinces him that the fake profile data is correct – although Twitter maintains that it is there. There is no such thing as a ‘hold’ agreement And it is going to be ready for the approval of the final transaction

But it can also lead to other complications The SEC is now investigating Mask’s behavior Led by his Twitter takeover push. Add to that his many public criticisms and disclosures, which could be a breakpoint for the limitations of market manipulation (according to the proposed shareholder action) and for Musk’s Twitter deal, where authorities veto the process entirely because of his behavior.

Could it be the plan of the mask? Various analysts have suggested that Mask is looking for a way out of the acquisition, and the overall feeling is that Mask will eventually be forced to pay and take ownership of the app, there are still some legal loopholes he could explore that could end the transaction.

Which would be a disaster for Twitter.

Although investors are dissatisfied with Musk at the moment, especially since his various comments and criticisms have tanked the stock, if Mask leaves, Twitter will be in a much lower position, many product leaders will leave and share prices will fall which will be difficult to correct. , Given the various questions raised by Mask about its process.

Can Twitter get itself back on track, and return to growth, if Musk leaves its takeover push?

In short, leaving the mask would be a big, universal statement that Twitter is not a good investment, and as the media hype subsides, it could further reduce interest in the app, potentially hurting growth for next year.

Maybe, then, the real purpose of the mask here – to the detriment of the company – is that it has no choice but to accept a lower offer price, which could save Elon himself millions of dollars from his takeover bid.

Either way, at the moment, it doesn’t look good, and there are a lot of moving parts that must keep current Twitter CEO Parag Agarwal awake at night.

It still seems like the Elon era is coming, but when, exactly, is a completely different question.

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