The Elon Musk-Twitter court battle is unfolding as Musk anticipated, now that the judge has enacted phase 4 of the billionaire’s plan.
A judge on Monday ruled that Twitter must turn over documents from a former executive that would show how many ‘fake accounts’ are on the platform.
“Twitter needs to give Elon Musk documents from a former Twitter executive who Musk said was a key figure in calculating the amount of fake accounts on the platform, according to a Monday court order,” Reuters reported.
“Bot and spam accounts on Twitter have become a central issue in the legal fight over whether Musk, who is Tesla Inc’s chief executive, must complete his $44 billion acquisition of the social media company,” the report noted.
“Twitter was ordered to collect, review and produce documents from former General Manager of Consumer Product Kayvon Beykpour, according to the order from Chancellor Kathaleen McCormick of the Delaware Court of Chancery,” the report added.
One attitude that sets rules-bound Conservatives apart from effective dissidents is the formers’ obsession with “how?” while the latter ask “who?”
Having taken this lesson to heart, I now make a point of looking up the major players in situations like this.
The question here is “Who’s Kayvon Beykpour?”
Or rather, who was he?
Two top Twitter execs — Kayvon Beykpour, head of the group that builds the social-media app’s core features, and revenue product lead Bruce Falck — said they were fired by CEO Parag Agrawal.
Twitter is in the midst of a pending $44 billion takeover by mega-billionaire Elon Musk. Beykpour, in announcing his departure on Twitter, didn’t cite Musk’s imminent takeover as the reason for his exit. Rather, he said in a thread on Twitter, Agrawal had effectively terminated him.
Tl; dr: A subcontinental economic mercenary from Silicon Valley central casting, whose career was propelled upward by “innovating” solutions to nonexistent problems, was fired by a fellow foreign technocrat during Musk’s Twitter shakeup.
Musk has since declared his intention to pull out of the deal, citing incomplete, useless, or missing data on fake Twitter accounts. It might be a coincidence that the former exec who got canned is the one the judge has ordered to cough up the data Musk wants. But the smart money says it’s not.
Given the known sequence of events, one might reasonably conclude that said former executive knew Musk’s estimate of fake accounts was right and stonewalled him on the data. Then he was fired, either for jeopardizing the deal, or as a scapegoat for decisions made at higher levels.
Either way, legal responsibility for furnishing the data is up to him.
Musk could be on solid legal ground to pull out of the deal if Twitter had attempted to defraud him during the takeover process.
“A reverse breakup fee paid from a buyer to a target applies when there is an outside reason a deal can’t close, such as regulatory intermediation or third-party financing concerns. A buyer can also walk if there’s fraud, assuming the discovery of incorrect information has a so-called ‘material adverse effect.’ A market dip, like the current sell-off that has caused Twitter to lose more than $9 billion in market cap, wouldn’t count as a valid reason for Musk to cut loose — breakup fee or no breakup fee — according to a senior Mergers and Acquisitions lawyer familiar with the matter,” CNBC reported.
Twitter’s documents could help the billionaire entrepreneur take over the social media giant for a lower asking price than previously offered. It may be the only hope for salvaging a platform that promises even more censorship of conservative voices ahead of the 2022 midterms.
This ruling just reinforces the fact that Twitter is in a no-win situation. Either the deal will fail and their stock will tank, or Musk will end up buying them at a discount.
It’s been hard to tell which outcome Elon prefers, but more than ever now, it’s looking like he expects to buy Twitter at a reduced price.
His liquidation of another $7B in Tesla stock is a pretty solid indicator.
Don’t get your hopes up for him to take full ownership of Twitter before the midterms, though. Even if it comes out in court that Twitter is 25%+ bots like everyone suspects, it will take time for the stock to crater, Musk to submit a new offer based on the lower stock price, and Twitter to grudgingly accept.
We’re probably looking at early next year at the soonest.
The good news is this deal should be wrapped up by the 2024 elections, which will be good for some cheap fun watching Trump’s restored Twitter account trolling Death Cultists.
Happy, hopeful, and practical
