Twitter shareholders approved Elon Musk’s purchase of the company weeks ahead of a court hearing over Musk’s attempt to pull out of the merger. Although no exact vote count was available today, multiple news reports said investors were supporting the Twitter boards recommendation 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 Tuesday,” Bloomberg wrote.
Today’s shareholder vote was the last remaining approval Twitter needed for the Musk deal, but the bigger question is what will happen in the upcoming trial in the Delaware Court of Chancery. Twitter is suing Musk to force him to complete the deal, and a trial is set to begin Oct. 17.
Musk owns about 9.2 percent of Twitter stock and was not expected to vote “as he claims Twitter violated the merger agreement,” according to the Wall Street Journal wrote. “The agreement requires Mr. Musk to use his stock to vote in favor of the deal, although his support is not critical if enough other investors back it.”
Twitter stock is up 0.7 percent today despite a sharp decline in the overall market. Twitter closed at $41.70 and shareholders would receive $54.20 per share if Musk has to complete the purchase.
Today’s “shareholders’ meeting lasted 7 minutes, with polling stations open for about 3 minutes,” according to the Bloomberg article. “Shareholders could also cast their votes several weeks before the meeting.” News reports ahead of today’s meeting indicated that there were already enough votes to approve the merger.
The judge criticized Musk before the trial
Musk has tried to end the merger by claiming Twitter lied about the number of spam bots on its service. Musk has repeatedly complained about the total number of bots on Twitter, but hasn’t refuted Twitter’s specific estimate that less than 5 percent of its monetizable daily active users (mDAU) are spam or fake.
Musk lost some important pre-trial judgments. His attempt to delay the trial to February 2023 was rejected in July. Last week, Judge Kathaleen McCormick denied Musk’s more recent request for a four-week delay. Write in their decision that “even a four-week delay would risk further damage to Twitter that is too great to justify.”
McCormick also last week criticized Musk for not providing the documents requested by Twitter, writing that “Musk’s own production of text messages revealed glaring flaws.” She ordered Musk to produce more documents, noting that Twitter was “born[e] most of the burden of proof”, while “the defendants had less to do but still failed to meet their obligations”.
A The Twitter filing was released yesterday said gaps in Musk’s production of text messages “are notable because they correspond precisely to the period in which Musk appeared to develop buyer remorse and put his plan into action to escape the merger deal.”
More Musk lyrics released
It is clear that Musk’s document “was incomplete because other parties wrote messages to and from Musk during this period that Musk should have produced,” Twitter wrote. These include texts between Musk and Morgan Stanley’s head of global technology investment banking, Michael Grimes, which was produced by Morgan Stanley.
This news shows that on May 8, Musk wrote Grimes that he was considering exiting the merger deal because of the possibility of a “World War III.” About half an hour later, Musk wrote to Grimes, according to Twitter’s new public filing: “An extremely fundamental due diligence point is to understand exactly how Twitter confirms that 95% of its daily active users are both real people and no double counts.” .”
“If that number is closer to 50% or less, which I would suspect from my feed, then you have fundamentally misrepresented the value of Twitter to advertisers and investors,” Musk wrote to Grimes. “To be very clear, this deal is moving forward when it passes due diligence, but obviously not when there are massive gaping issues.”
The Twitter filing said the news came weeks after Musk “expressly disclaimed any due diligence before signing and agreeing to a no-duty merger.”
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