Twitter’s talks with Elon Musk threaten to drag on as stock drops: sources

Elon Musk and Twitter were still negotiating a potential deal late Wednesday — more than a day and a half after the mogul offered to buy the site for his originally-agreed price of $44 billion, according to sources close to the deal. 

One source said there was “nothing imminent” in the legal saga as of mid-day Wednesday but that progress could potentially be made Wednesday afternoon. On Wednesday evening, two sources said a deal still hadn’t been reached. 

Musk’s deposition is still scheduled to take place Thursday and Friday in Austin, Texas. Twitter is considering letting Musk push back the deposition to next week in order to give attorneys more time to hash out the deal, but the company has not decided whether to do so, one of the sources said. 

Analysts have said that Musk’s desire to avoid being deposed was likely part of his motivation to offer to go through with his original deal to buy Twitter for $54.20 per share in exchange for the site dropping its litigation against him. He made the offer in a letter late Monday night, sources said.

But Twitter is not willing to ask a Delaware judge to call off the trial set for Oct. 17 until it has a finalized agreement with Musk, sources said. If Twitter agrees to push back Musk’s deposition and then the agreement falls apart, it would still “logistically” be possible to depose him next week ahead of the Oct. 17 trial, a source said. 

Ahead of Monday’s offer, Musk had approached Twitter with another proposal to buy the company for less than $54.20 per share, according to a source familiar with the matter. The talks ended without a deal. 

Elon Musk
Twitter’s legal team and lawyers for Elon Musk updated the judge who is overseeing the litigation to try to overcome mutual distrust and find a process for closing the deal.
AFP via Getty Images

In one sign that Twitter has not fully abandoned the legal battle, the company filed a notice of deposition late Tuesday for one of Musk’s deal attorneys, Mike Ringler. The notice wouldn’t be unusual during the course of normal litigation, but the fact that it was filed after Musk offered to go through with the deal raised eyebrows among analysts following the case. 

In a Delaware Court of Chancery filing on Wednesday afternoon, Chancellor Kathaleen McCormick wrote that the trial is still scheduled. 

“The parties have not filed a stipulation to stay this action, nor has any party moved for a stay,” McCormick wrote. “I, therefore, continue to press on toward our trial set to begin on October 17, 2022.”

Kathaleen McCormick
Some of Musk’s messages about the deal that should have been recovered are “likely… irretrievably lost,” Chancellor Kathaleen McCormick wrote.
Delaware Court of Chancery

McCormick also weighed in on a dispute between Musk and Twitter over messages the mogul sent via text, iMessage and through the disappearing messages app Signal. 

Some of Musk’s messages about the deal that should have been recovered are “likely… irretrievably lost,” McCormick wrote. She said she is not sure whether she’ll enforce sanctions against Musk that have been requested by Twitter. 

Representatives for Twitter and Musk declined to comment.

Twitter shares dipped more than 3% early Wednesday to $50.25, indicating some skepticism from investors that the deal will close at $54.20 per share. The shares recovered somewhat mid-day following The Post’s reporting on negotiations between Musk and Twitter, then fell again to close down 1.4% at $51.30. 

Questions about Musk’s legal team potentially communicating with a whistleblower have also emerged in recent days. 

Twitter’s legal team has sought to investigate whether one of Musk’s lawyers communicated with Twitter whistleblower Peiter “Mudge” Zatko ahead of the ex-Twitter executive going public with concerns about privacy and security at the site. Both Musk’s lawyers and Zatko have denied communicating with each other ahead of Zatko raising his concerns in August. 

Court documents show that Twitter has found an anonymous May 6 email to Musk’s lawyer Alex Spiro from “a former Exec at Twitter leading teams directly involving Trust & Safety/Content Moderation” offering to speak with Spiro “via alternate means.” 

Chancellor McCormick said it’s “at least plausible” that the sender of the email was Zatko, according to court filings. She ordered Spiro to file an affidavit explaining how he handled the email. Spiro filed his response on Wednesday afternoon shortly before a deadline set by McCormick, court records show. 

Spiro denied ever trying to contact the sender of the email and reiterated that he was not aware of Zatko’s allegations until he went public in August, according to the affidavit.   

Between Musk’s likely desire not to testify and the scrutiny of Spiro, Musk’s team had reasons to get the deal finalized on Wednesday, one source close to the situation said. 

Twitter should also be motivated to get the deal done as well, according to Wall Street analysts. If Musk weren’t buying the site under terms reached during a much stronger market, most analysts say its stock price would sit somewhere around $20.

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