Twitter shareholders approved Elon Musk’s purchase of the company, weeks ahead of a trial over Musk’s attempt to get out of the merger deal. Although a specific vote tally was not available today, multiple news reports said investors backed a recommendation by Twitter’s board to approve the $44 billion deal Musk agreed to in April before changing his mind. “A majority of Twitter shareholders voted to accept Musk’s $54.20 per share offer to acquire the social networking company, according to a preliminary vote count read Tuesday,” Bloomberg wrote. Today’s shareholder vote was the last approval Twitter needed for Musk’s deal, but the bigger question is what will happen in the upcoming trial in Delaware Court. Twitter sued Musk to force him to complete the deal, and the trial is scheduled to begin on October 17. Musk owns about 9.2 percent of Twitter’s stock and was not expected to vote “given that he has alleged that Twitter breached the merger agreement,” the Wall Street Journal wrote. “The deal requires Mr. Musk to vote his shares in favor of the deal, although his support is not critical if enough other investors support it.” Twitter stock rose 0.7% today despite a big drop in the overall market. Twitter was at $41.70 at the close, and shareholders would receive $54.20 per share if Musk were to complete the purchase. Today’s “shareholder meeting lasted 7 minutes, with the polls open for about 3 minutes,” according to the Bloomberg article. “Shareholders could also submit votes for several weeks before the meeting.” Reports before today’s meeting said there were already enough votes to approve the merger.
The judge criticized Musk before the trial
Musk tried to get out of the merger by claiming that Twitter lied about the number of spam bots on its service. Musk has repeatedly complained about the overall number of bots on Twitter, but has not disputed Twitter’s specific estimate, which is that less than 5 percent of its monetized daily active users (mDAU) are spam or fake. .
Musk missed some key decisions in the pretrial phase. His bid to delay the trial until February 2023 was rejected in July. Last week, Judge Kathaleen McCormick rejected Musk’s newest request for a four-week delay, writing in her ruling that “even a four-week delay would risk further harm to Twitter too great to justify.” Advertising
McCormick last week also criticized Musk for failing to provide documents sought by Twitter, writing that “the production of text messages from Musk himself revealed glaring deficiencies.” He ordered Musk to produce more documents, noting that Twitter “was born[e] most of the burden of discovery” while “Defendants had less to do but still fell short of their obligations”.
A Twitter file made public yesterday said the gaps in Musk’s production of text messages “are notable because they correspond precisely to the period when Musk apparently developed buyer’s remorse and put into motion his plan to exit the merger agreement.”
More of Musk’s texts were made public
It is clear that Musk’s document “was incompletely produced because other parties produced messages to and from Musk during this period of time that Musk should have produced,” he tweeted. This includes texts between Musk and Morgan Stanley’s head of global technology investment banking, Michael Grimes, which were produced by Morgan Stanley. Those messages show that on May 8, Musk wrote to Grimes that he was considering pulling out of the merger deal because of the possibility of “World War III.” About half an hour later, according to Twitter’s new public filing, Musk wrote to Grimes that “A very fundamental element of due diligence is to understand exactly how Twitter verifies that 95% of its daily active users are both real people and not are counted twice”. “If that number is more like 50% or lower, which is what I would guess based on my feed, then they have essentially misrepresented Twitter’s value to advertisers and investors,” Musk wrote to Grimes. “To be extremely clear, this deal will go forward if it passes due diligence, but obviously not if there are huge problems.” The Twitter filing said those messages came weeks after Musk “expressly disclaimed any due diligence before signing and agreeing to a non-due diligence merger.”
